Reality check ......Projected Vision for Auryn/Medinah
… And …
…Where… We …
… Stand …Now…
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Does anyone have an idea of the width of the vein? It would be nice to know how many tonnes of ore are being blasted per round and how many tonnes of ore per vertical metre.
Its literally bewildering reading BB’s assessment of where we are and how we got here. Passion projects are admirable but it’s important to keep one foot in reality. Claiming that AUMC is the 1/1000 exploration play that has made it to the big leagues is analogous to a parent lauding their young child as the next Lance Armstrong after taking the training wheels off. No resources, no reserves, no mine plan/drilling/feasibility, two truck loads of ore, no payments, no assays, limited to historical mining stats that the market will ignore…yet trading at a $70M market cap.
If AUMC can start to generate a bit of cash flow from their toll milling initiative its definitely possible they can pay back Maurizio and over a very period of time organically grow the operation without any dilution. However, if you are an investor, the reality of a bit of dilution to expedite the process carries benefits. Unfortunately, any financing if and when it becomes available will be very expensive because, as BB points out, all of the expensive stuff that “normal” mines do (drill program to define a resource, feasibility studies, etc). are what people offering the $$ place value on. Investors aren’t willing to speculate on a small team trying to find and then follow an underground vein to achieve a return on their investment.
I don’t disagree that finding the DL Vein was a binary event from a fundamental standpoint. If they failed to hit it, Maurizio could have stopped self-funding the project. Its an exciting development but the first meter of a long race before the market pays any attention.
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Same person posts and price goes down. Not an optimistic poster and looks like a pattern
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Fact of the matter is that 40 tpd will get multiplied easily now with more than 1 working face. Even if we consvertailey fugure on 80tpd and 250 working days per year at $1,950 gold per oz we can forecast $20M+ profits WITHOUT DILUTION.
Baldy doesn’t want to admit that is possible because it is so unusual. And he is still thinking in terms of institutional recognition of the investment via drill programs and blocked out resources. He is dismissing the all important point of netting $20M with only 70M shares outstanding. There is a clear path forward on that.
Now taking a financing arrangement via debt or dilution may still be a better option BUT the benchmark (floor) will be measured against what can be attained going it alone.
This pissing contest between BB and BE comes down to the very simple point above, Can Auryn produce in the $20M annual profit range doin things on their own in a relatively short period of time 18 to 24 months?
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Dentman. You’ve made this comment a few times. Inferring that I am somehow selling small blocks of shares after I make a post to knock it down. I will tell you that I have neither bought nor sold any shares in AUMC nor MDMN for several years. I will disclose if I ever buy a position but with no shares to sell, any notion that I’m naked shorting is pure conspiracy theory…for the record.
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I remember you used to rip on Handshake for fing with your investment. You’re doing the same thing he did and now you’re fing with our investment that you don’t own
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$20M in profits would equate to 21,000 of ounces produced at an AISC of $1000/oz.
84 ounces a day (21,000/ 250 days) or 2600 grams
that would be 90 tonnes a day using an average 30gpt grade or 45 tonnes a day using a 60gpt grade
I don’t think the grades will come anywhere near averaging those levels but, if they do, its certainly possible to make that many daily truck trips to Enami (does anyone remember the distance?)…I’m less confident in their ability to mine that much ore in a day given their current setup…also important to keep in mind that the blended ore will carry considerably lower grades…
That’s the simple math… definitely doable with all things going in the right direction…never seen that in mining even with the best financed and operated mines but time will tell. That’s what I’m waiting to see.
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I’ll put on my Sigmund Freud hat for a moment. I think some are subliminally thinking that since the intersection with the DL1 was seemingly interminably delayed, the same will hold true for the production roll out. Mother Nature pulled a fast one when the DL1 started out dipping at a 45-degree angle at surface only to upright itself 80-meters below the surface. Maurizio is first and foremost a businessman and an entrepreneur. He knows how to execute.
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I believe Maurizio is generally an optimist and presents a forward-leaning, forward-looking statement in the quarterly updates. Let’s say that is the case here. Suppose it takes 2 quarters to do everything outlined in the plan. For example - they are not able to hire as fast as they want, equipment takes time to procure, the scoop breaks down again. But in two quarters we have connected with the upper level, improved the ventilation, constructed the gallery and finished 20m in both directions to begin going down to lower levels. If that happens, we are still in fantastic shape. As long as the grades are as expected, we can expand at an ever-increasing rate.
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Don’t forget we’re heading into their winter in May, could slow things down
2022 - is this El Niño or La Niña … aww, nevermind. 
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So if you are wrong and they are able to average 30gpt and they hire enough crew and equipment, they will indeed hit that mark of $20M.
You have some concerns, fine. But you must admit your response above is not one of your typical looney bashing responses directed at BB. This is a very possible outcome that will see many multiples in pps appreciation.
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As the old saying goes: “if my Aunt had balls she’d be my Uncle.”
Lots of ifs but the $20M is always a possibility. I’d put the odds of achieving 30gpt average ore over any sustainable period at less than 5%. But a 10-15gpt is probably over 50% so, somewhere in the middle.
Beyond the grade is the cost. Even if you assume another crew, additional equipment, I don’t think I’ve ever seen a mining operation of this minute scale able to achieve an ASIC below $1300oz. Yes, the higher grade helps considerably but this is still a blast and mine operation which is barely mechanized and then requires the additional, expensive, steps of transport and toll milling.
If they can mine with a $400-$500 per ounce margin it would be commendable.
Lastly, if they overcome all the odds that I’ve laid out, and are able to achieve $20M in profits in a year, the question becomes: can they do it again? BB references this 30 P/E average valuation (which is way too high by the way) but any P/E in AUMC’s case is not relevant. Forward multiples can only apply to mines that have a mine-life (estimated to varying degrees). Without resources or reserves every year becomes a “can we chase the vein successfully” exercise. While TheMiningPlay participants might be doing cartwheels, the actual market (more of my focus) isn’t willing to assign value by making a bet on that exercise each year.
This being said, there are a lot of pseudo “mom and pop” operators who never develop a mine plan and do just fine by allocating a portion of profits to their pockets and the balance to continuing operations.
I think there is a considerable window for the company to execute, prove the naysayers wrong (or right) while investors looking to establish or add to their position can do so at these levels. Maybe until the next or next or next binary event. We’ll see.
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And be one of the highest grading gold producers in the world? Thats crazy talk
Are major mining companies going to pass on making a play because there arent blocked out MR/MR? I guess this is where that all important thing called leverage enters the discussion. Are all of the mids and majors ok passing up while Auryn just keeps going it alone for several years foward with presumable $2,000+ POG?
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What is the width of the vein? If it is only 1 foot or so wide, forget about any tonnage from a single face. Assume 1 foot (30 cm) in a 2 m x 2 m x 2.m round. That gives 8 cu m per blast of which 1.2 cu meters is of the vein (0re) and the rest is just quartz-of no value. . At a specific gravity of 2.65 the ore weighs 3.18 tonnes. At 40 Au g/t this contains 127.2 g Au or around 4.09 ounces of gold. m Is the gold confined to a certain section of the vein or is it spread throughout the vein? Lots of guessing required here.
Dude. You have a looot of reading to do before your next post. Show me an example of a mid/major buying an exploration play with no measured MR/MR (regardless of small scale production). Now find me one that would also be willing to pay North of $70M in value.
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Convenient you step around the part where NOW you say the company has greater than 50% chance of being one of the highest grade gold producers on the planet. Go back and read your posts where you mocked this notion and now you are supporting it.
If Auryn can prove that they are able to consistently produce at a 10-15 gpt level, you would be very foolish to think this would not attract multiple suitors. Hell, you are a so called expert lurking around with a ton of interest it seems or is it that you have a multi-decade passion project type hobby on your hands 
I think BE’s point is that THE MARKET… which means the Mids & Majors… need more than pix of a fat vein to get the wallet out. His side of the coin is absolutely valid. It is a counterpoint. Yes, it could be conveyed more objectively than subjectively but his POV is an asset here. My opinion only.
BTW: profitability in the OTC market can definitely stimulate a temporary non rational PPS
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Hi guys,
I don’t think the point has been made very well but this deposit is not for sale to a major AT THE MOMENT unless the offer was just too good to pass up on. The heavy lifting has already been completed and most of the ultra-high risk has already been mitigated. The explosivity in a situation like this is front-loaded. Management can ramp up production quite rapidly by putting in “spirals” to the next lower level at whatever pace they can handle.
Recall back when it appeared that the Caren Mine/Larrissa Adit was about to go into production. Maurizio made the comment that the engineers confirmed that they could put in 6 new levels above the Larrissa Adit and 7 below. Recall also that at the informational meeting in Las Vegas he mentioned that he wanted Auryn to RAPIDLY become a mid-sized gold producer.
At this particular stage of development, the GROWTH PROFILE that a new producer can create is very dynamic. The majors can’t replicate this. Barrick can’t go from 200 to 400 to 600 to 800 working faces being simuItaneously mined like Maurizio can go from 2 to 8 working faces. I think he’ll ride this wave all of the way to the beach UNTIL production plateaus out which it will eventually do. At the El Penon Mine, Meridian and Yamana rode their wave for 24 years. They started producing at 14 gpt gold and now the low hanging fruit is gone and the average grade is 4 gpt. If a major wanted to get involved, then I could see him inviting them into a JV on perhaps the Caren Mine/Larrissa Adit. This is where those three 140-meter “chimneys/ventilation raises” need to be completed before SERNAGEOMIN signs off on it.
The beauty of ramping up production rapidly is that the AISC to produce an ounce of gold equivalent goes down because many of the costs are of a fixed nature. This makes the PROFIT MARGIN on each ounce produced go up. If not only the PROFIT MARGIN per ounce produced is going up but so too are the number of ounces being produced because of more working faces, then the profits can go up in a somewhat parabolic fashion as opposed to in an arithmetic fashion. Why share that RIGHT NOW?
The DL1 project is going to open up the eyes of a lot of folks but I just can’t see Maurizio sharing it with anybody right now. All 6 of the main mesothermal veins are part of a “Mesothermal Vein System”. Recall how the Merlin 3 links everybody together as it runs from east to west. The magma chambers that underlie vein systems like these extends for many, many miles. The individual vein that looks interesting to me is the “Fortuna Oeste” that branches off of the DL1 and heads to the NW. This had great grades in the trenches at surface and was over 2-meters in width even up at surface. This is one of the ”massive veins” that the updates keep alluding to.
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