The Mining Play

Auryn/Medinah - 2021 - 2nd Half General Discussion

Is that the second trip of the day?

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better build a loading ramp or get a real loader meant for trucks. That was painful to watch( owned lots of wheel loaders of my own FWIW)

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My first thought when I watched it “is that bucket going to reach”

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gonna have a tough time placing it right for that truck with lack of reach and lift height. IMO But hey they’re moving ore :wink:

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Yes, that was tough. Keep in mind that was the 1st scoop. Once he places another scoop there he won’t be able to go higher as the mound will build up. If they build a dirt ramp along the truck that will solve the problem.

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long way to go, but rocks are moving! I’ve been here for 10 years. still don’t know if I’ll make any money. My initial investment was using student loan money, lol.

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How could that possibly happen? Is “WallStreet Bets” fairy dust in the mix? I could see it for AUMC, but it’s a stretch to far to think MDMN could be over $10 in a week, but who knows? A while back I posted:

Well, we have some movement finallly! After the close at 0.0038 today on good volume, MDMN only needs a 4X increase to reach the above scenario. It is quite possible things work out as I envision. This could have a market cap of $200M (65M X 0.015 X 200) in a relatively short time if management hits on all cylinders and brings it all together. If the divy is released with MDMN attaining 0.03 - 0.04 so much the better. Then, this will be the investment it was meant to be.
Yes I’m optimistic (and far too patient)! :slightly_smiling_face:

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Maybe us shareholders can throw some spare change together and get one or two of these for them Husker… Caterpillar's biggest wheel loader - The statistics behind the size. - YouTube

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Now we’re talking! 45 tonnes per bucket! Then we’d need a bigger truck. :slight_smile:

Just to point out the obvious: right now that loader must go down into the mine pick up rock, come back up, and dump into the pile, … rinse repeat … Looks like that is maybe a 1 yard bucket or maybe a little bigger. So 20+ times up and down to make a pile and then load the truck one bucket at a time, 20 times or so. That would be 20 tonnes. To make the 40 tonnes per day, do it a second time before your shift is over.

That’s one obvious reason why there is a severe limit on current mining rate and thus revenue. Also, that’s why there will be no divy, IMO, for some time. They will pay back the current loan and then have to expand the mining rate with the purchase of more equipment and mine development before letting any of that capital out the door. This does not even count the formal resource/reserve definition work they have mentioned, which does not come cheap either.

If they could get to the point of 40 or 80+ tonnes a day over the next 6 to 12 months or so and have their next expansion steps (e.g. sorter or other processing) planned out, then we’ll be talking something more material that could justify some of these higher market caps. IMO they believe they will get there. They wouldn’t have put in the money they have if they did not have pretty clear vision to at least the 40 to 80 tonnes per day. What comes after that … we’ll see. But for a while be patient while they slowly get there. We are at baby steps stage but at least we are finally moving forward.

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Mike - love your enthusiasm, but I think I’d better be protective of my identity. But thanks anyway. I did make a couple of inaugural posts at CEO.CA/mdmn - courtesy of you!

Its been such a long time that we have had a legitimate reason to hype that maybe we all have forgotten how?! Those Twitters people have more enthusiasm that ten of us combined here for sure! :slight_smile:

We do need some sort of announcement that the main production vein has truly been intercepted, separately that they have connected with the old shafts, that their ventilation problems have been resolved and daily production has commenced to really go crazy.

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Give 'em 15 some odd years with LP and then see where their enthusiasm is. :wink:

I don’t “do” Twitter myself. I always referred to them as “Twits”. Probably not PC, but why should I start now??? :smiley:

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Speaking of twits, Stocktwits has 110 people watching MDMN.

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It’s kind of fun seeing all of this twitter activity but it’s also important to realize exactly what is going on here. Right now, a large percentage of the investment world wants four things. They want exposure to copper, gold, early production opportunities that have SCALABILITY and positive cash flow. That seems like a pretty tall order but I think Maurizio has created a “package” of assets that fits the bill. This declaring of war on fossil fuels, the Green New Deal and the “electrification of America” and the mandates for electric vehicles and charging stations is going to take an enormous amount of copper at a time in which there haven’t been many new copper discoveries. The porphyries, skarns, breccias, mantos, etc. on or around the Pegaso Nero deposit hold a lot of copper and moly. The inflation that we are currently experiencing while at the same time denying, might not be as transitory as is being promised. Gold is going to be in high demand for a long time to come. Near surface, extremely high-grade gold production opportunities are in demand all the more.

Maurizio has put together a “package” of assets that match the desires of a large number of investors worldwide that greatly exceeds the number of investors in the mining community. The TIMING is very fortuitous; having just what investor want at the very time they realize they want it. Up until a little bit of recent Twitter activity there has been zero audience development efforts made by management. Those participants of “TheMiningPlay.com” might forget that we are just an infinitesimally small group of mining investors that have had a front row seat on developments that nobody else on the planet knows even exists. We talk about the “Antonino Adit” and the “Don Luis 1 Vein” and the 2 “massive veins” as if somebody else knows what the heck we’re talking about. The fact that a tiny fraction of this same DL 1 Vein has been in production for 30 years and averaged 64 gpt over that timeframe is known to pretty much nobody. Does anybody realize that Medinah used to trade at 18-cents BEFORE all of these positive developments were made?

What’s it going to take to blow this thing wide open? There are so many potential catalysts I could list that I wouldn’t know which one to isolate. It might be the results of the grades of perhaps the first 10 or so truckloads of ore having been shipped to Enami. Pro forma production projections made by management over the next several quarters might do the trick. How about a mega-deal on the Pegaso Nero? I don’t sense that 1% of investors would know how special a mesothermal vein deposit when compared to the much more common epithermal deposit. Who the heck is Richard Sillitoe and what makes his confirmation of the ADL having a mesothermal gold deposit so special? Here is a list of the accomplishments of just one of the Professional Geoscientists that Maurizio has surrounded himself with. When you surround yourself with the best of the best, good things tend to happen. BUCKLE UP!

R. H. Sillitoe Career Highlights

1996: Recommended exploration of porphyry Cu prospects,

Pangui district, southern Ecuador (four deposits de-

fined to date, mine development planned).

1997: Recommendation of the Opache porphyry Cu

prospect, Chile (reserve defined).

1997 (through 2000): Geologic modeling of Gaby porphyry

Cu deposit, Chile (in production).

2000: Predicted major subsurface extension of main Gal-

adriel-Julia vein, Esquel low sulfidation epithermal Au

deposit, Argentina, and recommended successful drill

testing (mine construction halted by local commu-

nity).

2000 (and 2001): Geologic modeling of the Boyongan por-

phyry Cu-Au deposit, Mindanao, Philippines (at feasi-

bility stage).

2002: Reinterpretation of origin of Pueblo Viejo high sulfi-

dation epithermal Au-Ag deposit, Dominican Repub-

lic, beneath barren limestone cover.

2004: Prediction of eastward blind extension of Pebble West

porphyry Cu-Au deposit, Alaska, United States

(higher grade Pebble East deposit subsequently dis-

covered and now at prefeasibility stage).

2004−2005: Assistance with geologic modeling of Hugo

Dummett porphyry Cu-Au deposit, Oyu Tolgoi, Mon-

golia (mine under construction).

2005: Recommended low sulfidation Au-Ag vein targets

under cover and at depth, Cerro Bayo, Chile (two

new veins discovered and exploited).

2005−2008: Recommended exploration leading to discovery

of the San Enrique-Monolito and Los Sulfatos por-

phyry Cu-Mo deposits, Los Bronces district, Chile

(Anglo American team received 2011 Prospector of

the Year Award from the Prospectors and Developers

Association of Canada).

2006−2007: Assistance with geologic modeling of Fruta del

Norte bonanza-grade intermediate sulfidation epither-

mal Au-Ag deposit, Ecuador (at feasibility stage).

2006: Assistance with geologic modeling of Resolution por-

phyry Cu-Mo deposit, Arizona, United States (at

prefeasibility stage).

2006: Recommended drill hole that discovered the Eureka

West low sulfidation epithermal Au-Ag deposit, Cerro

Negro district, Argentina (recently purchased by

Goldcorp Inc. for US$3.2 billion; mine under con-

struction).

2007: Geologic modeling of breccia-hosted Cu-Au deposits

in Gaoua district, Burkina Faso (infill drilling stage).

2007: Recognition of porphyry Au system at Biely Vrch, Slo-

vakia (prefeasibility stage).

2007: Assistance with geologic modeling of La Colosa por-

phyry Au deposit, Colombia (at prefeasibility stage).

2007: Assistance with geologic modeling of Navidad Ag-Pb

deposit, Argentina (feasibility stage).

2007−2011: Involvement in brownfields exploration of Es-

condida porphyry Cu district, northern Chile, which

led to discovery of Pampa Escondida and Escondida

Este deposits.

2008−2010: Geologic modeling of Caspiche porphyry Au-Cu

deposit, Chile (at feasibility stage).

2008−2010: Reinterpretation with J. Perelló of model for

stratiform Cu-Co mineralization in Central African

Copperbelt based on work in Zambia, DRC,

Botswana, and Namibia.

2009: Recommended search for low sulfidation epithermal

Au deposits in Afar depression, Ethiopia and Djibouti,

leading to discovery of several previously unknown

auriferous veins (drilling underway).

2010: Recommended drilling leading to discovery of Pom-

peya high sulfidation Au-Ag deposit, La Coipa district,

Chile (definition drilling stage).

2011: Recommended drilling leading to discovery of Or-

taçam North high sulfidation Au deposit, Turkey (defi-

nition drilling stage).

xii

We wish to acknowledge Rio Tinto Exploration (RTX)

for proposing this tribute volume in honor of one of the

world’s leading economic geologists, Richard (Dick) Sil-

litoe, and we thank RTX for generously financing the

costs of the volume.

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Those trucks look pretty darn slow to me. I think buying a quality metal detector and hitting the sand at the beach is probably a better investment…

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My math says at 80tpd we can net $10M+ annually doing it the old fashioned way.

That’s a nice target rate to work toward and then decide how and when to start advancing and scaling with automation. I agree that dividends won’t come out until this is achieved. Question is how long?

Once they start cashing checks here’s the order WIZ outlined as his opinion:

  1. Modestly improve the scale of its operations.
  2. Improve its public reporting and communications.
  3. Pay back its financial backers, dollar for dollar, no-interest, no dilution.
  4. Significantly improve the scale of its operations, including mechanization and a mill.
  5. Become a dividend machine.

I take number #1 to mean buy another truck and loader and hire another mining crew. How many trips to Enami will it take with the one truck to bank enough money for the second truck and second loader? Not much I don’t think. Someone can project that out because I don’t know the cost of the truck and loader.

Then I think they’ll do the financial forecasts that they listed in their objectives on the latest update. Chalk that up as #2.

Once we are working with 2 trucks and presumably shipping 80tpd, we can rather quickly achieve #3, paying back Maurizio. We will have a better idea from the financial forecasts. I think 1-3 should and will happen before the Chile winter. By next year this time, I think we will be at #4 for the start of next Spring’s mining season.

Thoughts?

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I generally agree with that outline. We won’t have #4 by that time but perhaps a timeline/plan on how they think they will get there.

I think some type of crusher with a sorter / concentration setup might be a step 3b and be quicker and cheaper but somewhat limited in tonnage able to be produced because you still have to truck it down the hill afterwards to have the rock processed to get the gold.

If they decide to go full out mill & processing on location then you start to talk big money / financing (maybe > $100M), which would require reserves to be outlined in a formal report, bigger permitting issues to be overcome etc. That would take a number of years.

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Thanks CHG. If they quickly get to netting $10M doing it without on-site processing, they should be able to convincely show a financer (preferably a debt financer) that the mill would bring profits to X times the current annual profit. With those reserves outlined, I think it’s very conceivable to get a loan to build that onsite mill.

I not a mining expert but I would like to explore what the variable X would be above. That is X in terms of a production multiple from say 80tpd. If we are at 80tpd and netting $10M what would the X multiple be for the tpd and the X multiple for profit? I’m assuming the X multiple for profit will be higher than the X multiple for production given the AISC will drop substantially. So are we talking 2x, 5x, 10x, 20x, 50x, 100x for production capability?

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I not a mining expert but I would like to explore what the variable X would be above. That is X in terms of a production multiple from say 80tpd. If we are at 80tpd and netting $10M what would the X multiple be for the tpd and the X multiple for profit?

And that can’t be known at this time. High grading 80 tpd at 40 gpt for a year is very different than ramping up to 1000 tpd at 40 gpt. This gets back to what these veins look like on average: grade and width and depth (having to do with how difficult / expensive they are to mine).

Auryn has said they want to “increase production and establish reserves” so that is basically the path to learning how much gold is there and figuring out how hard/expensive it is going to be on average to mine. And traversing that path will be paid for by steps 1-3. And the conclusion will indicate if it is worth pursuing major expansions. So we’ll see.

Just as something to compare against, 800 tpd to 1500 tpd would be a pretty good large scale underground mine. Hecla’s Lucky Friday, in production since 1942 and now over 6000ft deep, having in the past few years just added a new shaft for $400M capital, only produces 1000 tpd.

There are underground copper mines that produce much more tonnage but they are huge operations and hugely expensive. Copper is a different beast.

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Something else you guys should start considering whilst working out your numbers… energy costs. $100+ oil by the end of next year…or sooner… is a very real possibility. As far as I’m aware “they” have yet to invent heavy equipment that runs on windmills or solar panels, and the “green” folks always seem to like to ignore that fact that the manufacturing of all their tech they think is going to save us is so far very heavily dependent on fossil fuels.

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