Also from IHUB:
“Waiting for Raul to publish the financials for mdmn so we continue to trade
after the September drop dead date AS HE HAD PROMISED FOR AUGUST — Last publication was December 31, 2018”
I had not heard that he was indicating to anybody that it would be done in August. I assume that management knows that some broker/dealers are about to start declining buy orders.
Fidelity has declined MDMN buy orders for more than two years, as it does with all non-reporting pink sheet (grey) companies. I still think this will get straightened out and after the next couple of positive cash flow quarters we will see a divy announcement with an ex date for the divy and a distribution date. That is the “normal” way it works. that will allow the company to obtain the OBO list current with the ex date. Maybe this will be a real trading/day-trading stock once financials are filed.
Good luck with that…lol
Hey mangelsen, I think all MDMN needs is a compilation, not audited or reviewed financials. So, a reputable CPA could prepare them in a day or so? There’s not much really to report over the last couple of years anyway.
If it were that easy why haven’t they done it yet? You are on the Titanic. Don’t you know when to get off?
Nice to see Gold moving back in the right direction. High of 1818 for today
Knowing how much high grade ore we can produce before we need to infuse money for mechanization is the big key here for me. If there are enough tons at high enough grades there will be millions of dollars to invest in mechanization to scale upwards and avoid the dilution pill. That’s what I would really like to hone in on. If the overall grades are normal single digit grades on the larger longterm scale, that’s acceptable. We just need to be able to scale the project internally.
I’m not a mining expert which is why I attempt to facilitate a productive back and forth conversation with the intelligent mining brains here and zero in on where the widest gaps are in their conclusions. I’m still baffled how opinions from very smart mining brains can be so far apart.
From more of a novices vantage point, it appears that folks like you and Baldy don’t want to give enough credence to the samplings. If they are so meaningless what’s the point of even doing them? If we can’t extrapolate projected grades from sampling what’s the purpose? When they state that grades are improving at depth and they are confirming the existence of a mesothermal vein system, why do some of the pessimists say well the highest grade gold mine on earth is X gpt so these samples are bogus, hand picked, not a large enough sample size etc etc etc. It’s fine to discount the grade to a certain extent by considering some of these points, but surely there should be an overall consensus that these grades, hand picked, small sample size or not, is extremely positive.
I agree with Baldy that BB can be over optimistic on some points but it’s hard for me to believe that they can be so way off from eachother. I read Baldy and BB’s posts very closely if you couldn’t tell. It would nice to establish more commonality in their view points to establish some commonly accepted baseline projections for the group here to digest. Perhaps its a mixture of still being too early, not enough data, ego, overly compensating for a preferred outcome. Bottomline, some baseline consensus would be nice to see from the smartest folks on the board. The fact that BB and Baldy are so far apart on this tells me that one of them is way off on this. I’d like to know which. I think reality lies somewhere firmly in between their viewpoints right now.
Back to the key point here for me. How many high grade tons, say 20 gpt or higher is reasonable to expect that can be mined by this preliminary and inevitabley temporary methodology of blasting, scooping, and trucking to ENAMI. If they can’t turn enough profit by doing this to be able to invest internally to scaling the project, I agree with Baldy then that this is very problematic from an investment and dilution standpoint despite the amount of value that lies in the ground.
If the company claims they can do 40tpd why are we questioning how long it takes to drive it and get it processed etc to ENAMI? 40tpd is 40tpd. They surely figured on trucking it did they not? I’ll stop right here and kick this into Breccia Boys court.
Brecciaboy, can you please provide a compelling argument as to how 40tpd as the company stated is their goal is doable? Does this include trucking to ENAMI as well or would be losing several more days in the transportation piece of the equation. If we are doing math on 40tpd x 260 working days x an assigned gpt, but the time needed to transport is not included aren’t these flawed calculations to project from? Is this quickly scalable to 80tpd by adding just one more working face and doubling the amount of men, adding another truck and scooper?
I don’t see why we can’t come to a reasonable consensus on something like this. It doesn’t seem like an overly complex projection given what we know and using a mining brain to confirm. Brecciaboy you have talked frequently by multiplying the number of faces by 40tpd but let’s stop and analyze that better. How difficult, time intensive, and costly is it to double the size given where we are at right now? Why is this a doable expectation without the need for help, financing, more advanced mining methods? Skeptics here don’t think this artisinal approach funded out of MC pocket is likely to.sprigboard us to the next level without dilution anytime soon. I look forward to another one of your enjoyable posts with maybe just a tad more flavor for convincing us why this is not only doable but likely nearterm.
From the 2Q objectives:
Intersect the Don Luis vein and begin exploitation on multiple fronts with regular shipments of ore to Enami. AURYN will ship to two different processing plants. Material with grades over 25 g/t Au will be shipped to one location for direct smelting. Grades below 25 g/t Au will be sent to a second location for flotation processing.
We will know this year in the next couple Qtrs whether Auryn will meet this objective.
Some quotes that illustrate the wide gap in thinking. I’d love to know just how big MC is actually thinking is doable on our own dime.
They are including the mention of a processing plant in their objectives, so I believe MC is very bullish on what is being uncovered here. I think we can safely assume that Maurizio would not agree with Baldy’s conclusion above or else he wouldn’t even bother putting that in the informational releases.
To expand on that, I don’t think it’s even a question to assume internally they are very far apart from Baldy’s sentiments. What I truly do wonder though is how far apart they are from Brecciaboy’s.
J1127,
IMO there is not enough information to be precise but the general outline of the intended trajectory is there. All IMO:
40 tpd is their stated initial goal. How much / how long can they do 25 gpt or higher? Probably quite a while at 40 tpd given at that rate they can easily ‘high grade’ if needed. We know they sampled high grades clear over at the Caren and the Fortuna Mine averaged over 20 gpt for quite a while. So there should be material to pick from. Having said that, there are plenty of low grade samples among Auryn’s data. It is by no means clear how much > 10 or > 25 gpt material there is. Also the very narrow veins are a serious risk IMO. 0.5m veins are hard to mine. In this case, that 3m x 3m “blast” gets 0.5m x 3m of material and 2.5m x 3m of nearly barren rock. This is why the “increasing width at depth” is being mentioned by Auryn on a regular basis. But they are not going to be going hundreds of meters in depth for 40 tpd. So they will have to high grade and find the thicker areas most likely as near surface as possible.
They have mentioned working with the school / eng. students to figure out what could be done to improve the roads. This is because the roads suck. It took “2 hours” from bottom to top for the excavator. The truck? Maybe 1 hr? Maybe > 2 hrs on the way down. This means maybe one truck could make 1 or two trips per day? So I don’t know if they have a 20 tonne or 40 tonne truck but that gives you an idea. And they could maybe increase to two or three trucks but unless the roads really improve (requires money and time) you can not have too many trucks on that road at the same time. So maybe a couple hundred tonnes per day? Definitely no way 5000 tpd are going down that way.
In light of #2, they are looking at a “concentration” system or ore sorter. These have become popular in recent years. Small operators have put them into operation and so have large operations. For maybe $10M or $20M they could set up a mill and a sorter. Bayhorse Silver has done it for less than that. Volume remains modest, but maybe 500 tpd? But then you can decrease your transport volume by maybe 60% up to 90%. Then one truck is equivalent to 5 to 10 trucks with unsorted ore. The effectiveness of the sorter depends on the ore itself and it takes time to figure out settings specific to certain ore most likely.
I think they can reasonably get to step #3 self funding over the course of a couple of years, maybe 18 months once they start actually getting some revenue.
After that it is less clear. If they really want to step up tonnes and grades start to decrease just because they can not high grade so easily and then they might need that “processing plant” BE talks about and then they need to come up with maybe $50M or $100M or even more depending on the size of the operation. At this point some type of funding etc. is likely required if they don’t want to take years and years. And funding requires that proof of “reserves” BE talks about because that’s the only way investors provide capital.
I think they will try and get to step #3, fund some more exploration with that money along the way, maybe $10M or $15M or something, and figure out what the next step is: a bigger gold operation or spend bigger exploration money proving up the copper / moly far enough to get some interest from bigger players via JV or other investment. If they want to do a bigger gold operation then how big? Do they just expand organically or they going to go the classic route of a big construction program with big funding etc. They will learn a lot just as they go along mining.
Cornhusker, thanks for your thoughts.
Just a question. In #2 above you talk of “5,000 tpd”. I keep on reading on this thread that Auryn has been permitted up to 5,000 tons per MONTH (of course, I have not seen the permit). And, when other posters start running numbers they come to 40 tons per day per face assuming about 5 faces - when you multiply out about 5 faces and maybe about 25 days per month it comes to about 40 tons per day (5 x 25 x 40 = 5,000).
Maybe we need to get clarification on the 5,000? Is it tons per day, or tons per month?
You are correct. It’s 5000 tpm. My main point is that the limit under current conditions will not be getting a bigger and badder permit. They have to cure other infrastructure issues first or simultaneously.
Auryn is confident this is the case:
Continue developing the tunnel to intersect two massive, known structures encountered during previous trenching operations. (See: trenching program update.) These structures are each greater than 2 meters width in the trench.
and
OUTLOOK
MiningAll indications are that grades are increasing, and the structure is getting wider as it gets deeper. This is consistent with a mesothermal deposit and lines up with previous reports provided by Robert Cinits (A.C.A. Howe) and Richard Sillitoe. Management’s outlook for the future is extremely bullish.
Near term Auryn is definitely pursuing the low hanging fruits of the high grade gold ore exploitation. It will take several quarters to show if this is as fruitful as management is anticipating. I recall back in 2016 they were anticipating 25K oz/per quarter and 100 K oz in the 1st full year of production. That was while they were working on the Adits 1-3 of the Caren Mine. Now they have opened up the Fortune while allowing the Caren to wait later production. I have little doubt that once they have the necessary permitting that 100K/yr will be attainable. I look forward to December 2023 when the option with Hochschild will either be exercised or walked away from. That is the time frame I will be assigning before this investment stays or is removed from the sock drawer.
Thanks CHG for the balanced perspective. If we can get up to 80 tpd after a few months and be able to high-grade that amount for a year, we are looking at that $10M-$20M annual profit.
Where I’m disconnecting from Brecciaboy is how he thinks we can become a dividend machine while ALSO being able to scale up production. That doesn’t seem realistic given we need the profits to reinvest for mechanization.
Well, Doc is and always will be optimistic about the ADL.
Having said that, it is not impossible. Fortitude Gold, is an example, although not exactly the same. Currently they pay over 5%. 2019 more or less was their 18 months of construction, 2020 their ramp up, and 2021 production as expected. They will produce a bit over 40KOz this year. And they are working with limited defined resources but they have lots of property opportunity and exploration success so far to keep a mining path defined in front of them.
So such an idea can happen. Having said that, they are working with a small simple open pit mine and heap leaching ore in a great jurisdiction in Nevada. Their mine expansion will probably just be another small open pit less than 1000m meters from the first. They continue to drill to define the new target while paying a dividend and they are still putting free cash flow in the bank. So it can be done.
Grade is everything along with keeping costs down (related to wider vein widths). But in the end you only generate X amount of cash (if you’re lucky and good) and it can go in the bank, in the ground, or back to shareholders. Every dollar can only go one place. So it is a tradeoff. And without doubt once they get going there will be plenty of opportunity and need to spend money on exploration and construction. As an example, look at how much money was spent by Auryn in their original JV, something like $6M to $10M in a relatively short period of time. And if they decide to send money to shareholders instead, it pretty much by definition, slows down the activity in the other areas.
If you listen to a FTCO earnings call you can hear this playing out in realtime almost every call: one shareholder wants more dividends so they ask about “special dividends” or raising the yield, the next shareholder wants more mining (revenue, profit etc) so asks about exploration and reserves, etc. The CEO is constantly having to tell a story of balance. While remaining committed to dividends you have to keep putting money in the ground (exploration & development) or you go out of business. The ratio of those things changes from Q to Q depending on circumstances.
Their permit isn’t limiting…i.e. it will be adjusted upward as needed to match production levels.
I think there are going to be a lot of wonderful surprises over the next 12-36 months. For those of us who have been here for 10+ years, the next 3 years are going to be a dream, in my opinion.
Hoping this is like a tech company! We are in the early adopters phase now. I realize it’s been going on for 20 years, but the whole Price / Quijano era was nothing but mining people, not the ground. We still have some clean-up to do on MDMN from that time period. But I suggest you count the early adopters phase starting at when AUMC started putting out quarterly updates!
I would point to CHG’s post above as an excellent overview. You need to keep in mind that BB and the various board members of Medinah have been throwing out “unmet” projections for over two decades. Any reference to a “dividend machine” is laughable given the company’s current stage of development (or lack thereof).
For those whipping out their calculator to determine profitability I’d re-emphasize CHG’s mention of logistical challenges. You can’t just assume 80tpd x 25 days x 40gpt to come up with some fantastical cash flows.
Beyond the road conditions limiting the haulage (I wouldn’t drive a 40t truck down that road) there are also seasonal factors (read: winter).
CHG mentioned the issues with blasting a narrow vein. What starts at 40gpt can end up under 10gpt on a blended basis and the company simply cannot afford a sorter (which are tricky anyways). Following underground veins is extremely complicated. Many blasts will generate uneconomic ore. Where are the tailings going to be stacked?
Nobody seems to factor in the costs of a toll agreement with Enami. Moisture content, recoveries, toll treatment charges. Terms are very unfavorable for mini miners who often get taken advantage of.
As stated, the dividend machine, let alone $10m annual profits are laughable given how much money needs to go into expanding the project beyond artisanal level…even if executed flawlessly.
Lots of good discussion recently. I think that CHG hit the nail on the head when he said “GRADE IS EVERYTHING”. This is an old euphemism in the mining industry and it is 100% true. With what has been revealed to date, the big question for me is what kind of grades can we expect out of this mesothermal vein system. I think the TONNAGE and MINE LIFE issue is looking beyond positive and needs to take a back seat compared to GRADES. If there were a corollary to “GRADE IS EVERYTHING” when dealing with mesothermal vein systems, it might be “WIDTH IS GRADE”, with an accent on the word “IS”.
In Low Sulphidation (LS) vein deposits like this one, the gold ore tends to be pretty much restricted to the vein itself. If you think in terms of the GRADE of the post-blast “rubble” in an LS system, the grade of the rubble resultant from a blast in an area in which the vein is 0.5-meters-wide will be half that of an area of that same vein in which the vein is 1-meter-wide. In a 3-meter-wide adit, the vein material in a 0.5-meter-wide vein only occupies one-sixth of the working face width and the vein material will constitute only one-sixth of the volume of the post-blast “rubble”. The other five-sixths is pretty much barren wall rock.
The 9-Tonne sample sent to Enami that came back grading an average of 45 gpt gold was taken from up high in the northern aspect of the old Fortuna Centro Vein (now known as the Don Luis 1 Vein) where the vein was approximately 0.5-meters wide. This vein widens as you move south. Auryn has no concentrating facilities on-site other than crude “hand cobbing” involving throwing the shiny stuff in one pile and the dull stuff in another. If there was ZERO sorting/hand cobbing done on site then the actual grade of that vein only material had to be 6-times that 45-gpt average grade that Enami measured. This is because that pile of rubble consisted of only one-sixth vein material and five-sixths barren wall rock. (This is not the case in the much more acidic “High Sulphidation” (HS) type of deposits in which the acids etch the wall rock and allow the ore-bearing hydrothermal fluids and gases to move laterally into the wall rock.) I’m not saying that the vein material itself must have averaged 270 gpt gold in this instance because there was some sorting apparently accomplished and LS systems do have a little bit of ore in the wall rock.
As far as on-site sorting goes, that’s tough to do partly because the high-grade vein material is sometimes not shiny but more of a dark gray (ginguro) material containing “electrum” which is a mixture of gold and silver. You saw the presence of this material in the 62 photographs that were recently posted on the Auryn website. In a lot of deposits, it’s the boring looking ore that carries the high-grade gold and not necessarily the shiny stuff. It appears that some sorting has been going on so that dilutes the effect. In an LS MESOTHERMAL system in which the widths (and often grades) of the veins definitely tend to increase with depth, this “mesothermal math” in which the rubble grades increase with width can be very important. For example, if the vein dilates out to a 3-meter width at a certain vertical level within the vein structure, then THEORETICALLY all of the rubble would be made up of the 270 gpt ore. In reality, the vein material in such a scenario would not come in at 270-gpt gold but the point is that it will be a heck of a lot higher than the 45 gpt material found up higher in the share structure. That’s why they say that in an LS MESOTHERMAL system, “width IS grade”.
Remember that “GRADE IS EVERYTHING” and it really is in mining. “Width IS grade” in LS mesothermal systems is partly why the average gold grade in a MESOTHERMAL VEIN is so much higher than the average gold grade found in the typical EPITHERMAL vein system in which the veins do NOT widen with depth. Not only are the grades higher, the volume of ore is much, much higher. Why? Not only because they widen with depth but because they often extend downwards up to 1,500 meters. The “mine lives” of these systems can be enormous. Something had to be responsible for Richard Sillitoe, himself, to fly over from London at about 80 years of age, and spend 4 and a half days at the ADL. Sillitoe has been credited with several world class discoveries in the region. Keep in mind, that in the chapter in “The Geology of Chile” written by Victor Maksaev on the metallogeny of Chilean deposits, he cites that one of the prominent belts of Mesothermal deposits in Chile extends from the Curacavi Mining District on the ADL’s southern border to the Colliguay Mining District on the ADL’s northern border.
ACA Howe and Sillitoe already informed us that this is a MESOTHERMAL VEIN SYSTEM. Management recently told us that the grades and widths are increasing with depth. The sample results recently released from “Shaft #1” of the Fortuna Mine clearly reveal the grades improving with depth. These results were immediately criticized as being “grab samples” although the press release said nothing of the kind. All samples taken by a Professional Geoscientist (P. Geo) must be “representative” of the ore from which it was taken. KEEP AN EYE ON GRADE AND WIDTH OF THESE VEINS ESPECIALLY THE ONES MANAGEMENT REFERS TO AS BEING “MASSIVE” i.e. OVER 2-METERS-WIDE AT SURFACE.
As far as cash dividends go, all we really know is that Maurizio stated in a press release back when the Caren was planned to go into production that “management would evaluate the possibility of cash dividend distribution after the first full quarter of production”. Maurizio is well aware that distributing cash dividends this early in the process would only be possible if some pretty serious earnings were anticipated.
So you choose to ignore that Maurizo never delivered on the Caren going into production while pinning your hopes on his comments on a dividend?? Or should we ignore the claims that Auryn was fully capitalized/funded to bring things into production five years ago while simultaneously going to the street (unsuccessfully) to raise money? For someone who’s down 99% on their investment over 20 years you seems to place a lot of faith in what management is saying despite a near 100% fail rate. It might be wise to adjust the blind faith due diligence
