This is a great quarterly update. Not all roses but clear in the status of efforts. I’m confident the next several quarters will provide material progress. Taking my Patience shot…
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Looks like there are 53 new photos as well: Gallery | AURYN Mining Corporation
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And videos.
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This statement joins a small handful of statements that we have gotten over the years that have been extremely bullish on the Alto. This one is particularly nice since it makes a direct connect with production; insinuating great quality ore, low cost of production and lots of it. Hard not to be pleased!
"I have the firm belief that once La Fortuna de Lampa project goes into production, and a correct evaluation of the entire project is achieved, it will be a mining operation with very similar characteristics of El Peñon.”
Luis de la Torre
HeadMaster
Civil Mining Engineering
Universidad de San Sebastian
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Photos 30/53 and 33/53 show a gentleman with his back to us wearing an El Penon vest.
is that the professor or is that an official from El Penon?
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Photo 38/53 shows this same person along with at least 3 others who have the same logo on their hard hats
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Just guessing, but that’s likely Luis de la Torre.
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Yes. I’m admittedly a bit biased to the negative side in this invesment so, say what you will…but that ain’t very much stockpiled ore (10 to 15 tonnes? one truck full)…(personal jabs edited out by mod)
… all of the economic extrapolations related to the DL vein are now moot as it turns out that they were mining the wrong vein…maybe they are on the right track as of the end of September but there is ZERO insight into the grade (or if they even found the right vein)…its a six month reset with an “incremental bonus” of other mineralized veins to potentially go after in the future.
This is mining, and they are chasing multiple veins during this EXPLORATION phase…its hard as sheet and most companies at this stage fail to enter profitable production…at least the grades on this vein they thought was the DL are believable but they are no longer chasing it…
AUMC has a $50M market cap. They need some big wins over the next six months to build on this, currently, rich valuation so as to accomodate their goals for an onsite plant, etc…the “benovolent lender” (AKA Maurizio) doesn’t have the financial means to bankroll this project beyond this exploration stage so it’s imperative for the company to increase the market cap (read: currency) to minimize the inevitable dilution required to take this into a true producer (not bulk sample toll miller).
Either way, while Maurizio mislead investors in initially telling Medinahmites that Auryn had adequate financial backing to progress the Alto (5 years ago)…I don’t think anyone can complain about his efforts in trying to make this work…and the fact that he’s a refreshing change from the criminals previously “running things”…I’ve met him several times and he’s a standup guy…which Kevin knows more than me…I wasn’t as impressed with David but it’s still a big loss and you would hope he’d be motivated to stay with the Alto vs. chasing another project…Maurizio is a busy dude
As a side note: its a beautiful spot, above the clouds
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Hey John, if it’s not much ore stockpiled why invest in a new truck (that’s a Big Nut) that’s going to be arriving in 2 weeks just to carry 10-15 tonnes ?? I am sure there are more stockpiles going on then you know of. Jmo
Also that looks like a different stock pile Italo was standing in front of at the beginning of the year.
Not sure DD. Do you see other pictures of stockpiled ore? They would have stated that they sent material to Enami if that were the case. It shouldn’t be too suprising that there isn’t much rock stockpiled as they just admitted that they were chasing the wrong vein. Yes, 15gpt material is typically worth mining but they will be breakeven on toll milling this type of rock as the scale is so small and the transport (and tolling) costs are pretty significant. Totally understandable that they would keep going for the higher grade DL to try to generate some cash flows…also explains why there’s a small pile of stockpiled rock…
not like a truck is a huge purchase but there may be some hope that they have confidence in finally hitting the DL this time…however, they ordered the truck before the end of September so its hard to say…
The bigger question: how do investors reset their watches to grade potentials? The “grab samples” on the vein that turned out not to be the DL were ~60pgt material. Or, did they “high grade” the 9 tonnes sent to Enami which came back with 45 gpt material (evidently not from DL). How did that morph into an “initial assay” of 16gpt? Not to mention, even if they did hit the DL vein in late September, nobody knows what the grades look like and, are they going to provide “real” assayed results or more hand selected grab samples with visual gold once that data comes out…
All of the above is why its so difficult to conduct any true analysis for exploration stage miners.
They keep running into more mineralization. That is called Good News!
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The release didn’t say they were chasing the wrong vein, read it again. Also, you are assuming that the picture is all the stock piled ore. That’s only about 5-10 tons. It’s from the last mineralized structure they ran into.
Your third paragraph is mostly inaccurate or (as you say) perhaps it’s just your negative bias.
While it’s difficult to value today, that can change very quickly. As tightly as AUMC is held, you are in or you aren’t if/when it takes off. I give it 1-2 more quarters.
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So the vein along with the associated minerializtion they referenced hitting on June 23 was or wasn’t the DL? If it wasn’t, wouldn’t that be equivalent to “chasing the wrong vein” over the past 3 months (and counting) as all of the speculation on this message board has been extrapolating minining/economics/cash flows MR/MS based on the assumption, per the company, to finding the DL vein.
You would know better on how many other stockpiles there are but I assume they would be quick to announce other shipments to Enami so it’s odd that there are multiple pictures of one small pile of dirt. If they have 100’s of tonnes of stockpiled ore it would be a good idea for the company to quantify that. They don’t have a problem quoting a “headmaster’s” wild speculation in comping El Penon (crazy statement given the stage of development). I would think quantifying stockpiled ore would carry more empirical evidence of progress.
Re: the third paragraph and flying blind on mineralization, any clarity you can offer would be helpful . Specifically, regardliess of what vein they were tracking can you explain the journey from 45gpt to 16gpt? There are a lot of plausible explanations (typicalliy the high grade sampling gets diluted down with volume) but there’s clearly been a lot of speculation here on average grames per tonnes across 1000s or millions of tonnes based on the higher “nuggety” data.
My math may be wrong but, assuming they added another 70 meters of tunneling (per the update) that would be ~400tonnes (if you assumed all was stockpiled which doesn’t make sense given only a small portion would be “mineralized”)…but whatever that portion is, would/could be the amount in excess of the picture…I have no idea
No doubt the capital structure in AUMC is held tightly and is the far better way to invest in the asset. Unfortunately it’s partially “tight” because MDMN shareholders have been patiently waiting for their allocated shares.
Looking at the bright side, there hasn’t been any opportunity cost holding shares in either AUMC or MDMN over the past 13 months as it has been a very difficult period for precious metals. Particularly the juniors.
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They don’t have to “find” the DL vein. They didn’t chase the vein the first vein they ran into. Read it again.
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No shipments have been announced because they haven’t started until they have the truck. Unless you own one, you are paying through the nose to get one to ship (IF YOU CAN EVEN FIND ONE.)
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No reason to quantify anything at this point. Until assays come back (which are taking about 3 months) it’s all speculation. They will know faster by shipping and processing.
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Why try to undermine Luis de la Torre by putting his title in quotes? Do you know anything about him? I wouldn’t characterize his speculation as wild given he and two of the other professors were involved with El Penon from the onset and they’ve analyzed our ore and seen far more of the property and tunnels and structures than you or I have.
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It’s a different vein. Read what the update says. It’s a new structure, not the DL. The new structure where they assayed came in with the results published. They weren’t following a vein - look at the map. They are intercepting it by crosscutting it. Along the way they have encountered 3 other structures and multiple ramifications. This assay is the first one they got back in the 3 months. It’s not the DL, nor are the results horrible.
The reason to the continue on the plan to stay on the SSW course is to intercept the DL. Even though the 3rd structure looks really good too based on the images, they are continuing to the DL. The reasons given: a) known high grades. b) connect with the rest of the system for ventilation to scale.
I don’t think they are at 400 tons. They weren’t in mineralization the entire 70 meters.
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Math on the DL is very simple. It’s an historic, known, high-grade vein. The assays and results they got from it match what is historically known. For various reasons they are intercepting it below the old works.
Hypothetically, say the DL is a consistent with historic grades (mesothermal) and they know the width and depth based on trenching and where it extends to surface and sides of plateau. Say it is an average of 1m in width, 500m depth, 1200m length. I’ll let you do the math. Can you say El Penon?
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Totally agree on problems securing trucks and the backups at the lab. Also agree as to why they wouldn’t chase the other veing with decent metals.
The “non DL” vein they referenced in the 2nd quarter is the same “non DL” vein with the 16 gpt assat…How could they make the following statement if they hadn’t even hit the DL vein???
“Nineteen samples have been taken from the Don Luis vein and surrounding area. Lowest grade samples were taken from surface. All other samples are from underground development with eleven having grades of more than 20 grams per ton. The highest grades identified are 103.9, 112.5 and 1220 grams”
My point is that any recent met work on the DL is not available. They are flying blind while identifying additional minerlized structures (which isn’t bad).
And when flying blind, unless a geo is putting all of his eggs in a basket of historical grades (mesothermal) it’s a bit aggressive making comparisons to any mines, let alone El Penon at this veeeery early stage.
I would agree that something b/w 50 and 75 tonnes of stockpiles ore could come out of 70 meters of tunnells…I’m suprised the photos only capctured that small round of dirt…to be continued.
Nothing against the headmaster who probably didn’t even know he was being quoted (kidding).
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Great update for AUMC of which I’m not a significant shareholder of until Mdmn gives them to us. Why don’t we have those shares?
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I was trying to find what Enami charges for processing the ore. I could not find any (new) info, at all.
I did, however, locate a Medinah article (part of the Medinah, Cerro, Aruyn, history of articles I’ve collected & saved) which was dated Apr 27, 2013. Also, it might have been posted by someone ( Doc, Wizard ??)
"…In order to fulfill its mission, ENAMI’s assets include one smelter, five processing plants, purchasing agencies, and a network of technical support and technology transference facilities, focused on some 2,000 small size private sector producers of copper and precious metals.
ENAMI provides loans, especially to small size producers, allowing them to explore and identify new ore reserves, develop and enhance their mining facilities, buy equipment, and reach adequate levels of working capital.
Production, purchasing, treatment, technical and financial support operations of ENAMI spread along seven regions in Chile, covering a large area from the coast to the Andean mountains.
ENAMI purchases ores and concentrates from small and medium scale producers, process them in the concentrating and SX-EW plants, and the smelter, and exports the proceeds as mainly cathodes and refined copper to international markets. A wide range of fostering programs focused on small mining are aimed at increasing their business competitiveness and sustainability.”
ENAMI MONTHLY RATE SHEETS
The link below will lead you to a 3-page monthly worksheet ENAMI distributes to its mining clients describing how much they will pay their miners for various commodities of various concentrations. Interestingly, all prices are good for the entire month no matter how much the price of the various metals may change on the world markets within that month.
http://www.enami.cl/images/stories/pdf/ … zo_001.pdf
The title of this page 1 spreadsheet can basically be translated as: “The rates ENAMI will pay for the month of March 2013”. Note that the Chilean Peso (CLP) also uses the dollar sign insignia (“$”). Currently, 472 CLP equals one USD. [now 813.27 !] The chart is broken down in vertical columns corresponding to copper bearing ore, gold bearing ore and silver bearing ore. All 3 metals have a “base” concentration and the rates they pay for this particular concentration of ore as well as a “scale” amount they’ll pay for designated grade increments above the “base” grade.
The base grade for copper ore needing “froth flotation” treatment is 2.5% for this “insoluble” copper. Copper ore is either “soluble” (dissolvable) in sulfuric acid or not. Near surface “oxide copper” is typically soluble in acid. This is the basis for “supergene enrichment zones” at which very high grade copper accumulates due to natural acid leaching. Deeper down (or further into the adit) “sulfide copper” is typically not soluble in acids, it is “insoluble copper”.
The “base grade” for both soluble and insoluble copper is referenced at 2.5% copper. The “escala” (scale) column indicates what ENAMI will pay for ore grading higher than 2.5% copper based on 1% increments over 2.5%. The Spanish Word “tarifa” refers to payment rates. The “base” grade for gold is 5 grams per metric tonne (“tms” in Spanish).
Miners delivering gold ore grading above the 5 gm/tonne threshold are paid extra based on 1 gram per tonne increments over the 5 gram reference (“base”) value. Copper grades equal to or above 2.5% and gold grades equal to or above 5 gm/tonne are referred to as “direct shipping ore” or DSO. If your grades are below these metrics then you might need to bring your ore to a custom mill to remove enough impurities to get your average grade above those threshold limits or to sell to somebody besides ENAMI.
It might make economic sense to have even “direct shipping ore” sent to a custom mill to enhance (“beneficiate”) the grades. This is where the mining engineers (“P. Eng.s”) really earn their keep while constantly monitoring ENAMI’s payment rates and the fees for custom milling. The miners like those at the LDM typically use a variety of stockpiles to store high and low grade soluble Cu, insoluble Cu, oxide gold and sulphide gold.
A lot of the ore shipped to ENAMI is destined to be piled up into mountains on top of rubber leach pads. This space is precious so ENAMI doesn’t want some miner to put huge volumes of super low grade ore onto the pile and waste that precious space.
Exchange Rate:
For payment of the minerals and mining products ENAMI uses as the reference exchange rate “Observed Dollar” , the value being applied each week for the dollar value observed for the Friday before the week in which the accounts are cleared or of that which corresponds to the advance. The exchange rate used in determining these rates is $ 472.96 (Chilean pesos) / U.S.D. [Note that the USD exchange rate varies on a weekly basis but the metal payment rates are good for an entire month.]
Notes to offers of purchase for copper products:
2.1 Tax withholding Article 23 D. L. 824: 4% [Of course the tax man has his hand out for the first 4% of the value of the metals being exploited.]
2.2 General Rule: In the minerals of the award of the byproduct copper concentration rate were paid about 0.3% without applying the discount. By-product copper foundry products will be deducted 1% Cu.
2.3 By-product gold contained in copper concentrate by fare will be deducted 0.6 g Au / tms
Notes to the offers of purchase rates of auriferous [Gold bearing] products:
3.1 Tax withholding Article 23 D. L. 824: 4%
3.2 General Rule: A product that can be settled concentration rate should be deducted/discounted 0.15 g Au / tms law.”
Page 3 of this document reviews the penalties paid by the miner for various impurities. There are no penalties below the “tolerated” concentration levels cited. In between the “tolerated” and “maximum acceptable” levels there is a fine levied. Above the “maximum acceptable” level the miner needs to either get the contaminant levels below the maximum or sell your ore elsewhere. The miner can also be docked for excessive moisture content.
Before you start shipping ore en masse to ENAMI the engineers have a lot of calculating to do. They’ll run test batches to various mills in order to learn more about the metallurgy of the specific ore types they are dealing with. Since they know what ENAMI will pay during any given month they need to create a flow sheet delineating the most economic way to handle their particular ore. This can be a fairly complicated process.
It might make sense to do some custom milling to increase the concentration of the ore or remove contaminants if the price is right. The extra transportation charges need to be factored in should a custom mill be used. Medinah purchased an extra 47 hectares for their own mill and plant. I believe that the fee structure paid by ENAMI includes the shipping fees as long as the concentration of the copper oxides and sulfides are over the 2.5% benchmark and the gold grades above the 5 gm/tonne level. These are the levels needed to achieve to be considered “direct shipping ore”.
It would be nice if the photos had captions.
Perhaps Doc can add the captions for some of them.
As far as I know, the ore that has a (green tinge, goldish, silver/black) is copper bearing.
The black ore contains gold.
Moly ore ?
Silver ore ? ( silver, black, blue, green, mossy metallic colored mineral is calaverite, a mineral rich in both gold and silver.)