The Mining Play

Auryn/Medinah - 2021 - First Half General Discussion 🗓

https://onlinelibrary.wiley.com/doi/full/10.1111/j.1751-3928.2008.00081.x

Here’s a link to the type of deposit that the LDM might host. They’re called copper stratabound deposits and in Chile they’re referred to as “manto-type” deposits. Typically, they’re mined for their copper and silver contents. Hoch is big into silver and that might be what attracted them to the LDM. I would think they would be a thousand times more interested in JV-ing with Auryn on the very high-grade gold epithermals (mesothermals?) that Maurizio is going after. That’s their specialty i.e. underground vein mining. The cynical part of me says that Hoch did a JV on the LDM in order to backdoor their way into a deal on the very high-grade vein system. I have zero proof of that, however. IMO, we do NOT want to share those with anybody at this time unless and until the area near the confluence of the Merlin 3 which runs east to west, the Fortuna Oeste which runs NW to SE and the Fortuna Central which runs NNW are proven to be dense enough so that open pitting is deemed the right approach to exploit them. Auryn is currently (Q2) going after the much wider (2M) “massive” veins near the Merlin 3.

It’s obviously extremely exciting to be mining gold with the kinds of grades shown to date. Even at a miniscule 40 tpd rate a ton of money can be made. The real exciting part is getting in there in order to explore the subsurface aspects of that 5,000 meters of veins revealed in the trenching program that actually made it all of the way to surface. Every time they turn a corner, they seem to find a new extremely high-grade gold vein. The difference in the Merlin 3 area is that the veins average over 2 meters in width. In an underground tunnel, almost the entire working face of the adit will be vein material. If these are indeed “mesothermal” veins then they’re not only going to be likely to get wider with depth but also extend downwards a very, very long distance.

I would predict that the comfort levels of shareholders will go up immeasurably when cash flow information becomes available. Then as each day passes, the cash starts piling up and the investment community as well as the mining community takes notice. With cash flow, we can finally take pencil to paper and get a better feel for an appropriate price and market cap. In this exploration sector, until that point investors are kind of in the dark. From a risk/reward point of view, this is the sweet spot I should have been concentrating on over the last 40 years in this sector. Oh well!

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I would suggest a somewhat different logistical approach as suggested by CHG a couple of years ago. It is also an explanation of why 5 years has been prominent in the initial loan to MDMN and also the Hochschild option. Excerpts are from Aug 18 post by CHG (see post #278 p Q3 2018) These are only excerpts from the post:

Pretty clearly, the original ‘LDM’, the Pegaso Nero, and probably the Gordon Pipe area are all included in the JV (3000 hectares). All of this is titled the “currently named LDM project” in the PR. Yellow marks indicate those new claims that were published this past May, obviously filling in some properties for the JV.

That leaves some 7500+ hectares for Auryn including the Caren, Merlin 1 (2, 3, 4, etc veins) and Fortuna plus quite a lot of undefined / unexplored stuff to the south going down the side of the mountain from there. ,…

Note they could spend $7M and decide they don’t want to try and put the skarn into production, but still own 41% of that 3000 hectares. And they and Auryn could turn around and JV the PN to a bigger partner, with $7M of exploration already done, and potentially still make out with the copper / moly porphyry. Else if they define a nice skarn project and decide to spend that extra $23M, they can go into production for a while and JV at any time or explore themselves if interested.
In fact, you can note they basically split the south side of the mountain in two. If there is a porphyry right there where the Pegaso Nero is pointed, the property of both companies would obviously be involved in any future JV / mine etc. having to do with that target.
Hochschild has $750M in annual revenue or so. Legit to be sure and profitable (about $50M last year). On the other hand Freeport has about $16,000M ($16B) in revenue, so they are much much larger. I would guess Auryn got a better deal going this route than with FCM or anyone larger, being able to retain the potential gold production and 40% of the JV property worst case.

Back in 2015 CHG showed an LDM image detailing available information at the time. (Note the image below is portrayed “upside down” with South at the top):
From post #280 - an annotated image by CHG:

I believe the image below shows what that area looked liked earlier this year. It is around the area where NUOCO had an adit entrance for exploring the LDM. CHG can correct me on this if I’m mistaken, or add to his impression from several years ago what may be transpiring during the next couple of years regarding Hochschild. No apparent recent activity in this image that I can see.

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I’m willing if you are :rofl::rofl:

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Mints are running out of gold; not enough physical silver to cover paper - former U.S. Mint Director

(Kitco News) - A global shortage of physical gold and silver products has created a premium on coins and bars, and this premium is causing a disconnect between the spot price and the “true” price that retail investors need to pay, said Ed Moy, former director of the U.S. Mint.

Moy, who was the director of the U.S. Mint between 2006 and 2011, cites the inability of the mints around the world to keep up with physical coin and bar demand as a reason for this shortage.

“Not only the U.S. Mint, but other Mints around the world, Australia’s Perth Mint, the Mexican Mint, have all run out of gold, they can’t keep it in spot and there’s so many shortages retailers are having problems accessing that gold,” Moy told Michelle Makori, Kitco’s editor-in-chief.

Premiums on these physical gold and silver products can run as high as 20% in some places, Moy said.

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Thanks, Wizard much appreciated. For some reason, I never seem to see the advertising?

Medina Spirit - close enough.

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Formations below the surface like this cross section of a lava flow mountain, is why the buyers want the claims drilled out.
To try to determine, just where, the goods are?
They want you have to prove it up for them someway…


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Great Visualization CS.
Here’s one more that gives a somewhat different perspective.

Just in case anyone was wondering about the previous image:


Geology and Genesis of Major Copper Deposits and Districts of the World
A Tribute to Richard H. Sillitoe
January 2012
DOI:10.5382/SP.16
ISBN: 978-1-6294-9041-0

Authors:
Jeffrey Hedenquist at University of Ottawa
Michael Harris
Francisco Camus

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Medina Spirit wins Kentucky Derby

In case anyone is wondering about Wizard’s brief mention of “Medina Spirit”:

“long-shot Medina Spirit entered with 12-1 odds against it, but once he took the lead, the race was over.”

Even with the slight difference in spelling, could there be any omen more promising?

I’m looking into a third-mortgage on the house! :upside_down_face:

– madmen

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I wonder if our odds are the same 13 to 1 :joy_cat:

I’d be more than happy to Venmo you some cash to help.

Gold moving back over 1800 looking good for us. Hope we got some $ from the 1st shipment to Enami.

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I hope they tell us how much they got for each shipment.

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Just had a chance to look through all the responses after my questions. Thanks to all who responded! I appreciate your knowledge and insight.

Thanks for keeping this site going. I hope that the advertising does help offset costs.

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