I also like the ad we see about : How to Retire in Costa Rica.
;" six months from now, you could be living large in Costa Rica on less than you spend now". ???
**** do they know something we don’t"?? Or maybe they might be referring to our Political / Economical future… 
Was there a previously posted video (I must’ve missed it), or a link perhaps that didn’t work?
TIA
Kevin touched on a topic in his most recent post concerning the fact that the accomplishments made recently came without any dilution. In fact, it came without any dilution in either the share structure or in the ownership percentage of the asset. I’ve never seen this in 41 years of investing in the junior explorers. Going into production will induce dilution. The concept is insane. Zero “cost of capital”. Zero interest rate and the cash advances need only to be paid back if the operation is profitable.
Maybe we’re worrying too much about analogies to companies like Kirkland Lake and their ultra-high grade deposits or Meridian/Yamana Gold and their El Penon Mine. Because of the past lack of dilution and the present zero “cost of capital”, I’d recommend concentrating on EARNINGS PER SHARE. AURYN IS AN EPS PLAY. That’s where the payday is for shareholders of a company like Auryn.
Advancing into high-grade gold production with only 70 million shares outstanding is beyond a rarity. You don’t need to average 60 gpt gold in order to hit it out of the ballpark from an investment point of view. A MODERATE AMOUNT OF EARNINGS WHEN SPREAD OUT OVER ONLY 70 MILLION SHARES WILL RESULT IN A ROBUST EARNINGS PER SHARE FIGURE. Shareholder rewards are directly tied to EPS not to the total amount of earnings.
A while back I posted the results of a survey done at NYU’s Stern School of Business. Mining companies trade at an average “multiple” of 30.21-times their EPS. In fact, gold producers tend to trade at a higher multiple than the base metals producers and younger producers able to deliver dynamic growth profiles will trade at higher multiples yet. EARNINGS PER SHARE also correlates closely with the amount of cash dividends per share a mining corporation can afford to distribute. We should have better insight into when Auryn might be in a position to distribute cash dividends after they put out their financial forecast which is promised “once consistent production has been achieved.” This would be subsequent to intersecting the DL1 Vein and ramping up production.
The tiny amount of shares “outstanding” is not the only share structure anomaly that Auryn sports. The “share ownership” structure is equally anomalous. Management owns over 60% of those 70 million “outstanding” in a RESTRICTED/CONTROL format. That’s equally insane.
The whole story here is the deposit itself, the tiny amount of shares “outstanding” and the “share ownership” structure. The key concept is that you don’t need to match Kirkland Lake’s astronomical grades or another company’s astronomical production rates to provide ample shareholder rewards.
Here’s the catch, until there are EARNINGS (the “E” in EPS), few people will realize that Auryn’s upcoming “EPS” is going to be supercharged.
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I’m with you here. An investor will look at the expected cash flow from dividends, and then the share price will adjust accordingly.
There are a couple of different ways one could arrive at an expected price per share. The first, of course, could be as Brecciaboy suggests, 20-30 times earnings.
Another one might be applying a “capitalization” rate. Gold production companies typically pay 2-3% dividends. One can simply total the expected dividends for the year and divide that number (i.e. capitalize it) by the 2-3% dividend rate.
Mathematically, I think both of the foregoing are close to the same - numerically and semantically.
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Opps!Fiore Exploration | Drilling in the Shadow of Yamana's "Flagship Precious Metals Mine" - YouTube
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Disclaimer: These comments are offered from a troll with inconvenient facts.
Soma Gold is a South American, high grade producer (an actual producer) with forecasted production of 40koz in 2022, high grade material, two producing mines (actually own the mills).
Earnings and cash flow surging. Trading at less than 2x 2022 cash flow.
Outstanding shares: 63M with two insiders owning 60%+ of the outstanding shares.
Market Cap: $20M vs. AUMC at $60M
The reason why Soma trades at such a discount is b/c no institutions can own the stock. No liquidity and complete control (60%) by the CEO and head Geo. Most agree this should be a private co b/c of the capital structure.
There are many junior miners out there with similar profiles. Not a rarity.
Give me a break Baldy. Soma is in the jungles of Columbia where drug lords drop in every morning for coffee. They’re lucky to still be alive much less producing gold . . what little gold they produce. They have 3 producing gold mines that produce only 1 million $'s in profits in the last 3 months. I wouldn’t own Soma if you gave it to me. Every day you show up for work you’re taking your life in your hands. You also have 33 million in long & short term debt. Earnings surging? Their profit is up less than .5 million over the last year. JMHO but very little future with this company. . . . and the stock price reflects that.
LOL. Watching too many movies on Netflix these days (Narcos)? Many now consider Columbia a better mining jurisdiction than Peru or Chile.
Here’s the FACT sheet which you may have missed. However, it comes as no surprise that you would chose a bulletin board stock with a richer valuation (even on an enterprise value basis) than a company doubling their production to 40koz this year. It will take AUMC a loooooong time and a considerable amount of money to achieve the same (including the onsite plants). I don’t own Soma Gold. Simply using one of many examples of tightly held producing gold miners with a small float.
Gold moving again nicely today! 1840
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I am going to give the same example as I did a while back. GBR.V Great Bear Resources Ltd. I believe that Auryn is where GBR was in 2018, just starting off and their SP was .58.
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Looks like Auryn did some updates to their homepage
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Looks like it is a work in progress. They should also update PDAC announcement as that conference has been postponed till June: https://www.pdac.ca/convention/attendee-info/pdac-2022-announcement
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Much nicer weather in Canada then. 
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Curious that you now tout Columbia a better mining jurisdiction than Peru or Chile. Additionally you name a company that you apparently don’t currently hold a position in, as I’m sure you wouldn’t have mentioned you don’t currently own it otherwise. There’s an obvious reason you don’t own it, as astute as you are on financial shortcomings of companies. Could the reason this may not be an ideal investment (for me either, at least not at the present time) until the 0.25 warrants expiring early July are taken care of? The reported float currently is: Float 20,505,051.
Warrants Strike Price Expiry
24,946,043 $0.25 July 3, 2022
What happens to the float when the warrants are exercised? Will this then become a more attractive investment to keep an eye on? Will you continue to let us know what you don’t own? More importantly, will you let this forum know if and when you again become a shareholder with a stake in this company?
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A question to the wise ones.
Is there a rule in Chile that all gold bearing ores have to go to ENAMI ?
the warrants are owned 100% by two of the directors. This isn’t why I don’t own the stock. I don’t own the stock because it shouldn’t be public. When two of the execs own 60%+ of the company and is highly illiquid it creates a gating factor for any new institutional investors. It’s dirt cheap. The debt is being amortized down but nobody, of substance will buy the stock because of liquidity. Sound familiar? The difference is that AUMC trades at 3x the market cap with no production. I’ll admit that the upside potential for AUMC is higher if they deliver on the grades but the risk is also significantly higher because, as of now, they haven’t delivered on anything. We don’t even know how much the company owes Mr. M at this point. Keeping in mind that the company announced hitting the DL a year ago there is no doubt that they are way over preliminary estimates of budget. If this was a normal public company and they erroneously announced finding the motherload, only to admit that they were wrong six month later, the stock would be obliterated. However, similar to Soma Gold, this isn’t a normal public company so the standard market rules don’t apply.
To answer your question, I’d make an investment in AUMC when/if we can actually model a mine plan. As of now this is an artisanal play with a rich valuation. They can definitely grow into this valuation but there’s a lot of wood to chop. I’d rather buy (at the same price) once the fundamentals match the market cap. Anybody who thinks that buying will show up once they start production simply needs to reference the Soma Gold scenario which is why I brought it up in the first place. Try buying 100k shares in AUMC for under $1. You can’t and nobody will.
Is it curious or just another fact based on knowledge of the space? The Fraser Institute, a very reputable group, does an annual survey on the most favorable mining jurisdictions and, what do you know, Columbia ranks ahead of both Chile and Peru. Check slide 13 and or place foot in mouth.
Also worth noting: Mr. M’s key employee/partner/and advisor ditched AUMC for a project they are focused on in, you guessed it, Columbia. This is another project they were tirelessly trying to raise money for at the various conferences but, in this case, they had some success which is why Dave/they are more focused on advancing it.
Disclaimer: Watching Narcos on Netflix is not sound investment strategy
Hi CS,
I’ve never read about any mandate to send ore to Enami. Enami’s job is to take care of the needs of about 12,000 smaller miners and the Chileans they employ. As a consolidated group, these miners gain access to the world stage and to certain economies of scale just like the majors enjoy. Enami’s mandate is to not be a burden on the taxpayers of Chile so they are slightly profitable and not subsidized by the government. Many of the profits go back to the miners in the form of loans with extremely favorable terms for advancing their mining projects. The artisanal miners at the ADL received inexpensive loans made against future production from “CCM” to advance their mining project at the DL1 Vein. “CCM” (Credito Caja Minero) evolved into what we call Enami today.
Enami and CCM’s geoscientists did a tremendous amount of work on the ADL. One of their P. Geos, Luis Kaiser, did a lot of the work on geomapping and mineral potential. Later one of their P. Geos, a man named Waisberg, mapped pretty much the entire Fortuna Mine/DL1 Vein that was being mined at the time and a lot of very rich areas that never got mined. One of these was no doubt the intersection of Shaft A and Level 2 where Auryn’s recent 18 sample program revealed many intersections over 100 gpt gold and one of 1,220 gpt gold and off the chart silver. Don’t, however, expect the 1,200 gpt sample to be “representative” of the ore grades Auryn will be mining. We can only assume that this will be one of Maurizio’s initial targets. He made a vast number of recommendations to SMFL most of which they followed.
I’ve been running some models for quite a while as to some pro forma projections as to potential earnings based on a variety of conditions. The Jan. 7, 2022 quarterly update noted that on 11/30/21 management received a pre-liquidation value from ENAMI of $36,207 for the 48 tonnes of ore delivered to them recently. The accepted total was 15 g/t Au, 31g/t Ag, and 3% Cu. AURYN expects to receive final payout from ENAMI in January. Do not expect many shipments of ore from this vein system to be that low.
Based on a price of gold of $1,800, the gross value of 48 tonnes of 15 gpt (0.482 ounces per tonne) or 23.15 ounces of gold would be $41,672. If we assume that since the gold concentration was less than 25 gpt which is the threshold that necessitates that ENAMI also pay for the copper and silver components as “byproduct credits” then ENAMI’s fee would have been $5,465. This would represent $236 per ounce of gold or $114 per tonne of ore. The $236 per ounce figure represents 13% of the $1,800 price of gold. I think most would agree that this fee is not overly burdensome. If Enami did pay for the 3% copper as a “by product credit” then that 13% figure would be higher.
Enami does not provide trucks to the miners, so the miners need to provide their own. We don’t have the on-site operating expenses (“OPEX”) yet so we can’t compute an “All-In Sustaining Cost” (AISC) on a per ounce basis. We do know that the AISC average 2 years ago was $907 per ounce worldwide. Last year with inflation setting in the AISC was a little over $1,000. The average small miner in Chile is producing 7 gpt gold, shipping it to Enami and making good money at $1,800 gold.
What tends to happen with the new gold producers in Chile is that at first Enami will do all of the secondary and tertiary crushing, milling and processing of the ore. With time, the miners will learn that they can do certain tasks even cheaper than Enami. They’ll set up their own mill facilities once there is enough “mill feed” to make it economic. “Free milling” ore that is amenable to inexpensive simple gravity separation techniques will typically be done on site. Then that which is being sent to Enami is a much higher-grade “concentrate”. Transportation costs will go down as less loads will need to be sent in order to produce a given number of ounces of gold.
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Thanks for feed back Brecciaboy.
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Well I need to invite you guys over I guess by this notice I got when I started this post :: Let others join the conversation
This topic is clearly important to you – you’ve posted more than 11% of the replies here.
It could be even better if you gave other people space to share their points of view, too. Can you invite them over?
*** So consider yourself invited over. I’ll plug in the block heater on the skidloader and plow out a area for a bonfire, put the forks on and gather some logs and a bucket of gas and get er lit off. Bring a cooler to keep your beer and wine from freezing. I’ll start the welder /genset to plug in your crock pots and coffee pot. Bring your Face North warm clothes and a down sleeping bag if you can’t drive home after. Should be a good party, moons still up for most of the night still. Might even see some northern lights after the moon sets. Masks are optional but freeze up fast in these temps.
So till then; Here’s some sites for the type of equipment the boys up on the mountain could invest in next. www.goldclaimerbrand.com. … and a rock crusher.
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