You appear to be guessing wrong. So the rest of your financial analysis is also wrong.
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Hi Jimmyp,
I sincerely apologize to you. You asked me a question about a week ago that I failed to answer. Iāve been writing lately at a frenetic clip and I think the answer to your question is encased in this snip-it from a project Iām working on. The āinformational vacuumā quote is explained in an earlier chapter. It refers to what can happen when management only communicates via quarterly updates. I do not fault this management team one iota, however. I want them fully concentrated on the logistics of the upcoming production. Infrequent communication, however, leads to an āinformational vacuumā. This vacuum is inevitably going to be filled with total malarkey befitting the financial motives of those with goals that are not consistent with management or the average shareholder. Thatās just how things work in this business. Those promoting this malarkey, will tend to speak in generalities. They hate specifics. They find the need to discredit any ādetail freaksā, like that evil brecciaboy, that attempt to fill in the āinformational vacuumā with specific facts about geology or whatever.
Use the nonstop criticisms of management or the assets as a resource. Study them. Investors have a blind side. They can fall in love with a stock and be blinded to valid criticisms that they just donāt want to hear about. If this deal had what Brent Cook calls a āfatal flawā, that would have been announced from the mountain tops. If you study a list of the last 300 criticisms of this deal or of management and go through them one-by-one and you find yourself saying, āthatās the best youāve gotā then you can rest assure somebodyās financial motives are contrary to that of the company and its stakeholders. A lot of times it will have to do with abusive naked short selling and the obvious incentives present to kill a company. Other times it will have to do with people without a long or a short position in a stock but they are secretly actually believers in a project but theyād like to establish a long position at a lower level and they refuse to pay the current share price because it is theoretically āovervaluedā. Their goal becomes to induce selling by existing shareholders and dissuade buying by prospective shareholders. This provides these people with an āoptionā to establish a long position once they feel all of the risk is out of a deal. I think the solution in this case might be to have Kevin, if he is willing, to accept inquiries from shareholders wanting not inside information but just detailed relevant information like that which an āInvestor Relationā professional might provide. This would help address the āinformational vacuumā. Details trump vague generalities.
CHAPTER 7 (from āAnatomyā¦ā¦ā)
SPECIFICS ON THE COMMUTE TO THE TWO PROCESSING FACILITIES-FILLING IN THE INFORMATIONAL VACUUM
THE TRIP TO THE CHACON FACILITY
Starting at the plateau at elevation 1,950-meters above sea level, there is a 7 Km (4.37 miles) steep road with 19 switchbacks that leads to the valley floor (elevation 550 meters). From this location, you go SE 6Km (3.75 miles)to Chicauma. From Chicauma you go south another 6 Km (3.75 miles) to Lampa. The Chacon facility is located 113 Km (71-miles) to the south of Lampa. It is a 1-hour and 25-minute commute in normal traffic. From Lampa to the top of the plateau is 11.9 miles. It is a total of 83-miles from the plateau to the Chacon facility. Even though it is only 11.9 miles from the plateau to Lampa, ACA Howe estimates that it is a 1-hour commute from the plateau to Lampa coming down that steep road. Total driving time from the plateau to Chacon is about 2 hours and 25 minutes.
THE TRIP TO THE LAS VENTANAS SMELTER
The Las Ventanas smelter is located in Quillota, Chile just NE of Valparaiso. From āLampaā, it is a 71-mile trip that takes about 1 hour and 45 minutes in regular traffic. The commute time to Las Ventanas is also very close to 2.5 hours. The round-trip time on the road is thus about 5 hours to and from either facility. You then need to factor in loading and unloading time. Iām estimating right about 6 hours from the top of the plateau with a loaded truck to the next load being at the top of the plateau with a loaded truck. Based on a 24- hour work-day with three 8-hour shifts, 4 twenty tonne loads (or 80-tpd) is feasible but for now I would pencil in 60 tpd until we get confirmation of the data.
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The back and forth between posters trying to āput someone in their placeā or to discredit anyone elseās point of view is counter productive. The optimal approach is to separate information from emotion. While BE can be, at times, undiplomatic, his perspective on this stock/project is of value. BBās perspective is likewise of value. However, these two posters have different orientations as to the property, its potential and what the future holds. Neither is completely right nor wrong, just different. BE, while aware of the geological possibilities takes the view that regardless of these possibilities āwhat can you prove so that investors will want to buy into this stockā and he is particularly knowledgeable in his view. BB, while intimately aware of geologic structures, tendencies, methods and potential results views the mountain first and foremost and he is particularly knowledgeable in his view. Both posters add value, but the value they add is different. There is great potential for this property and this project but there is not sufficient detailed facts (like gpt, mine life, production etc) to complete the picture from a working mine point of view, so far. To arrive at estimates of where we think this will go requires making a significant number of crucial assumptions. We simply donāt know the assays or the width, depth and consistency of the DL vein. There are indicators that can be drawn upon (BBās view) but they are not provable at this time (BEās view). Hopefully the indicators are correct and will become provable, but they are not reliable enough for there to be a market for this project with investors, at this time. I want both of these guys to continue posting because it gives me a better ability to assess what can be and when we will know that it is moving from possible to probable to invest-able. At the end of the day, what I want is to realize a profit and BE and BB give me information that allows me to guess what and when that will be. But, for now, itās just a guess. Donāt get worked up because someone guesses differently than you. None of us has been right yet.
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If these labs come back anywhere near what people have been talking about, none of this posturing/bickering will matter. Maurizio et al will FIND a way to get that ore into buckets, down the mountain, and to the processing plant. Theyāll work multiple faces and three shifts a day to do it. They want to recover THEIR money too. And the people who years ago said the do-it-yourself method would not work will just have to stand corrected. Period. Let the facts do the talking. Weāll see.
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One problem I see in all the discussion, this has been a speculative stock for the past 20 years and still is! It has been a tortuous journey for all shareholders that have been through all the ups and downs. This stock is a story of a company that has managed to survive as it transforms into a viable, profitable company. We all want to profit here, but personally Iām completely overweight in this stock, have been for a long time, and not willing to sink any more cash into it until it has positive cash flow and continuous positive results. As BE would say, I have a āconcentration riskā that cannot be overcome by more buying. There are far better speculative stocks based on the criteria BE uses to evaluate an investment. No argument there at all. BB is right on for where this company is headed based on the merits of what the geology of the mountain has already shown with far more to be revealed.
At this point however, Iām more interested in putting my investment cash to make consistent profits, and do so regularly with far less speculative stocks. I also use the same analytical criteria on those stocks I have positions in as BE does because they work and are financially rewarding. They simply arenāt appropriate to my personal investment style and goals for AUMC or MDMN at this time.
This is still a very speculative stock with far more risk removed than it has carried at any time in the past. Over the past 3 years, investing in other stocks while holding this one, has been extremely rewarding. Since I havenāt traded or sold any of my āinvestmentā here Iāve had lost opportunity mitigated by generating cash elsewhere. Time value in generating immediate cash is more important to me than trying to regain the paper loss here. I weigh the considerable effort of management to make the exploitation of the mountain the only reasonable way for them to recapture their, and importantly my, investment in this continuing endeavor, now fully aligned. Management are shareholders too, and will treat all shareholders of AURYN equally moving forward. Management will do this expeditiously and with the least amount of risk and time possible. Current investors have an inside window into the progress being made. This is not a trading stock and wonāt be until it is promotable. That time will arrive after there are measurable and profitable results. Until that time, this is a speculative stock with risk being removed daily and reported quarter by quarter.
Have a great week-end all.
EZ
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I can assure you that there is no secrete agenda to my posting nor do I think I have enough sway in my comments to have any effect on the share price. You admittedly provide a lot of details. Unfortunately, these details are all based on wild speculation and historical data. Because of this, there is gross inaccuracy. The Geo pontifications sound interesting but, over three decades, they have failed to result in any monetary reward for investors. Additionally, despite your endless praise for management (very reminiscent of your unwaivering defense of Les Price) they have not executed according to the business plan. Just go back to the past several years of predictions of being cash flow positive. Are they making progress? Yes. Does Maurizio deserve praise for his tenacity and willingness to self-fund the mine to this point? Yes. However, given their past performance it seems bizarre to me to assume that they will somehow start nailing the execution. Maybe temper the enthusiasm and see if they can get a couple truckloads of ore a week before making a ridiculous claim that 2, 3 or 4 a day is feasible. Maybe wait to get some assays back from the lab before predicting 60gpt material. Doesnāt this investment deserve a bit of skepticism vs. blind faith?
My main point, based on what we know and what weāve observed, its unlikely these guys are going to suddenly be printing money but for those looking to establish or add to a position, there should be a considerable window to buy shares at these levels IF they start executing. Iām looking for consistently high grades, some visibility on their ASIC, can they follow the vein in the face of no block model, what is any future financing plans look like (debt, equity, stream financing), etc, etc, etcā¦
There are 100ās of companies producing 20-50k ounces that have almost zero institutional sponsorship. The junior precious metals sector still isnāt getting much respect (the average PE of 30 is delusional). I could be wrong but Iād much rather wait to see this thing de-risked a bit before reconsidering an investment. I guess thatās what makes a market.
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You are correct you have no secret agenda. Its out there for all to read over and over. How someone is wrong but never you. Try posting about the stocks and quit making it about what is wrong about what someone posted. Your continous personal attacks to discredit are very Narsassistic type of behavior. You are better than this. Talk about the value or lack thereof of the stock not the person. I call you out because it seems you like all the attention when I see little stock in your post other than pointing out others mistakes and Les price which is so old news. We know what we own and why we own it. Bring facts not attacks and you would be credible. I see three facts from you. You do not own stock, you attack others unprovoked and you have an agenda of trying to prove your right and others wrong. Just quit with your junior high behavior. Its borish and mean like a bully. I wish this board could be focused on the stock good or bad but just when I think the board is doing well you jump out of the stands and steal the ball and we all sit and wait for the ref to take the ball from you so the game can finish. John just quit with your childish behavior. If you need this much attention start a reddit board on why these stocks are so disfunctional. You seem to have that down pat. Back to the stocks. Love them and patiently waiting for the end results.
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Can we please get back to topic!
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I offer several āopinionsā (there are currently no FACTS that anyone can parse through given the stage of the project) along with a few rebuttals to my supposed motivation in posting (offered by BB). If you canāt follow the back and forth I would advise that you limit your involvement/ reading to those posts and opinions that make you feel good about holding this investment. I donāt believe there is a āblocking/ignoreā function but even a āchildā should be capable of skipping past my āborishā contributions.
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Did I just read this?
āthere are currently no FACTS that anyone can parse through given the stage of the projectā
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Your most recent post made the same point as my post. You attack people instead of talking about the stock. Enough said. Back to the stocks.
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Yes you did even though it is false.
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Indeed. When you donāt have a mine plan nor any volume of measured ore, opinions are what can be debated. Is it a fact that Maurizio is funding the project? Yes, nobody is debating that fact. Is there a new blue truck, yes. How much ore it can move on a daily or weekly basis is up for debate. Despite attempts to calculate mileage, driving in the middle of the night, and capacity to āblow up rock.ā You have opined (for years) that the project would be in production and generating cash flow. That opinion has been incorrect. AUMC claimed to have hit the DL Vein over a year ago even though you would have argued that as being another fact. Point being, that these guys are making progress and hope to finally be in the āviableā mining stage. The limited amount of ore delivered to date, references to historical mining, sparse assay reporting, etc, etc. all lead to a discussion based on opinions. That would be a fact.
Thereās the rub; BE is not the only one attacking. Iāve witnessed him being directly accused of having a secret agenda using price manipulation (again) this past week or so without any facts to substantiate that claim. Iām not saying he does not have an agenda, but who has the right to play judge, jury, and executioner without hard evidence? I have read numerous jabs at BE, some worse than others ā but many jabs nonetheless. So BE continues defending himself against the criticism with the same personal jabs.
Personally, I doubt there is deliberate manipulation on his part, though I wonāt totally rule that possibility out. Seems to be a vicious cycle, especially with more posters now taking sides against BE based on speculation of his intentions. Itās just as bad to allow only pumped-in Koolaid to this forum without allowing anyone to question it.
As a few others have already noted, everyone needs to just ignore the posts from BE if they donāt like what he says. Some of us want to hear his educated POV and decide for ourselves. If there are any discrepancies, by all means, point them out or defend yourself against any personal attack with diplomacy. But why get sooo worked up over it that you all but deny anotherās right to express his perspective by demonizing him? As long as we all know the recent discovery of the DL vein and many other highly mineralized areas ā and the likely potential going forward ā why make such a fuss? Both sides need to keep the discussion civil w/o personal attacks. IMO, nothing is absolutely certain on either side ā¦ until it is.
John - I thought you were going to go away until the next quarterly update? Canāt you just let it go and let people to what you view as āhopium?ā
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Its a hobby for him, much the same as he accuses BB as having.
I actually think the discord is healthy and drives discussion. Baldy enjoys showing off his eloquent skill for bashing people, which feeds his over-sized ego. He does provide a healthy dose of skepticism and the people that dont like his style should just ignore him rather than getting all twisted up by it.
Thatās my opinion anyway.
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Sure. As soon as you stop accusing me of āmischacterizationsā and others accusing me of ulterior motives. I think itās fair for me to respond to those posts. Otherwise, I would agree that we are debating āstale opinionsā until we hear from the company.
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I think his posts are anything but confusing - just not what some people want to hear beyond their own perceptions. I want to hear them regardless of my own conflicting opinions. But here we go again, yet another jab. It doesnāt bother me except that the merry-go-round wonāt stop. Looks like yāall are going around in circles. Canāt everyone just stop making personal jabs? Let it go and just debate the known facts, let the opinions go for goodness sake.
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John, see, you just like being an instigator. You made the comment of not coming back long after the āmischaracterizationā comment. Face it you are addicted and canāt help yourself. Otherwise you would not have read any posts after your āIām leaving until next quarter comment.ā
Re mischaracterizations, I made one or two references to you mischaracterizing some things and you use that as justification. If thatās what you need to fuel your inner troll, knock yourself out. When we see each other, I will challenge you to look me or Maurizio in the eye and say you didnāt take any liberties, nothing out of context, i.e, you made no mischaracterizations in your posts to try and score points for whatever reason. You know it, and I know it.
Regardless - I donāt care if you post here. I only hoped you would be a big enough person to let people who you deem inferior to you in investing acumen continue to have the positive optimism they need to live with their sunk costs as this develops quarter to quarter.
We all know what we are stuck in. We all know itās much better than it was. We all know a lot still needs to be done.
Let me see if I can give you an analogy. Imperfect as it is. We own a dog. The dog has control issues and used to relieve itself on the carpet all the time. Now the dog is becoming better trained and we are working with it. Itās making progress but still does the wrong thing now and then. You come into our house and tell us how lousy our dog is and then you insist on dragging us to the stains and sticking our noses in them.
Why do you think that is welcome?
:::: mods - feel free to delete this if you think itās just contributing to more stains on the carpet ::::
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Admittedly, I laughed at that analogy. However, let me offer my version of your analogy and then Iāll hold off until the next company PR where we will inevitably (in my opinion) be resetting expectations for the project, cash flows, truckloads, etc.
I like your dog, regardless of its control issues and commend that is is evolving into better training. However, many posters on board speak about (and may actually believe) your dog as recently winning the Westminster. You donāt see me interacting with the Cornhuskers, HurricaneRicks, etc in any posting b/c they arenāt trying to put a bow on a poodle that is pissing on the judgesā shoes. They donāt pretend the stains are there so thereās no point in rubbing their face in the carpet.
I understand that some owners love their dog no matter what they do but this is an investment and a counter-viewpoint to some who have yet to be correct (or have the ability to see the mutt within the poodle) thereās plenty room for a difference of opinion.
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