The Mining Play

Auryn/Medinah - 2022 - 1st Half General Discussion

I could be wrong today. Not on the historical mining valuations but I could be wrong on my assumptions that the delays in trucking high grade stockpiles (free money) and/or the lack of assays is an indication of something being “off”. There could be a reasonable explanation but one hasn’t been offered, yet. Back to my hole until the company decides to address in the next update.

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Anyone going and maybe can get BE questions answered

https://aurynminingcorp.com/pdac-2022-come-visit-us/

There could be a reasonable explanation but one hasn’t been offered, yet. Back to my hole until the company decides to address in the next update.

Since everyone here enjoys the repetition of commentary:

I have offered one:

And you have at least partially acknowledged it:

Specifically, they just have not produced that much high grade ore by making the new tunnel as they were approaching the the vien structures at roughly a 90 deg angle. And even though they passed through multiple structures, many of these were quite narrow and so a simple 3x3m path through a 0.5m thick structure does not produce that much ore.

Could they have produced another truck or two? I don’t know. Probably. Could they have been moving ore one or two loads per day? Not according to this understanding which is based on the descriptions given by Auryn.

Turning about and examining Doc’s enthusiastic descriptions. Here are some responses on what I think are open questions:

  1. Yes there are many structures. How many of these are economic are unknown. Vein width is a fundamental issue that can not be dismissed lightly. I have provided concrete examples of this concern. Auryn has provided evidence that this topic is on their mind as well as they have emphasized the width of anything they have found 1m or wider because this is a width where things become straight forward. The can probably mine stuff down toward around 0.5m in width if the grades are good enough. After that it is probably very hard. This topic appears in the 1999 Howe report. In addition, they describe how the Fortuna vein narrows as it goes toward the south down to maybe 0.1m in width, which is simply not mineable. Of course this is at surface or only a shallow depth. Of course these veins may get wider at depth. They may not. Auryn did not find 2m or 3m width veins at the lowest levels of the Caren mine they examined. Also note, they did not find the highest grades a the lowest levels of that mine. Of course Auryn moved to the DL vein and targeted this particular spot of the DL vein because they knew the grades and width from the historic data and it was (supposedly) easily accessible, though it turned out to be harder than expected. This approach lowered their capital requirements to get going.

  2. IMO it remains to be seen how far and wide and deep the vein remains mineable. Assuming 1m x 1.7km x 700m deep at 64 gpt (or anything like that) average is about as optimistic as you can be. I would take the under on that one. For Auryn, it seems very likely there is enough easily accessible ore to recoop their up-front expenses and more. The shear scope of the vein and the known Caren results indicate that. Auryn’s behavior and pushing forward indicate their conviction of that. So their risk is probably low. But is there enough economic material for a 2 or 3 decade gold mine at some decent grades and mining rate? And can it be demonstrated without spending enormous sums of exploration money so that the market rewards Auryn with a large MC in the meantime? That definitely remains to be seen.

  3. The current model of toll mining will require the highest grades available. They need cash flow to fund some type of expansion and exploration to show the extent of what is mineable.

  4. To expand the mine to a more substantial mining rate is going to require quite a bit of captial: $50M, $100M, $150M? This will probably require some type of financing eventually. Maybe they will have enough cashflow established to do it with debt and not equity. But who knows at this time. We are a long way from knowing.

  5. This thing is going to require plenty of patience yet. Assuming the news is good and mining starts in Q3, and grades look good, we are still several years away from something that is more than a dig-and-truck operation. So patience will be required. I am still more optimistic than not. But I am not counting on the ADL to be the greatest gold mine in the history of the world for that optimism.

CHG

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Thanks CHG. A refreshing, informative post, with one foot still on the ground of reality while remaining optimistic (within reason).

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Using Doc’s data ( regarding the DL1 ) that he has provided in previous posts i did a very raw calculation of present values under various production assumptions.

Total vein material to be mined. 3,690,000 tons ( PER DOC )
Average grams recovered per ton. 15 (1/2 ounce ).
Average Gold price is $2,000 per ounce
Average Gold equivalent profit per ton. $500.
Production days per year. 250
Discount rate: 6% and 8%

40 TPD ( $5MILLION PROFIT/YEAR ) ( 369 YEAR MINE LIFE )
6% DISCOUNT RATE = $83 MILLION PRESENT VALUE
8% DISCOUNT RATE = $63 MILLION PRESENT VALUE

120TPD ( $15MILLION PROFIT PER YEAR ) ( 123 YEAR MINE LIFE)
6% DISCOUNT RATE = $250 MILLION PRESENT VALUE
8% DISCOUNT RATE = $187 MILLION PRESENT VALUE

200TPD ( $25 MILLION PROFIT PER YEAR ) ( 73 YEAR MINE LIFE )
6% DISCOUNT RATE = $411 MILLION PRESENT VALUE
8% DISCOUNT RATE = $311 MILLION PRESENT VALUE

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I guess it would be helpful to get the lab results back? Seems like it could at least settle some preliminary questions and give us a basis to start computing.

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Continuing the discussion from Auryn/Medinah - 2022 - 1st Half General Discussion:

Never had this much trouble getting filled by Royal Bank of Canada… Nobody wants to sell at these prices? Would anyone be able to post the L2? TIA

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Not be on the negative but they have been working and sending to the lab since early last year and they have not release anything up to today. It does not take over 9 months to get back test results. I just find it strange. I know miners report their earning and drill results every 3 months.

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I agree with BE on this

I’m sure it IS possible that something may be “off.” But I recall reading here, within this past year, that the plan is likely to start shipping the high-grade stuff to Enami as soon as they are in a good position to keep it rolling continuously. They have to finish making the mine structurally sound before they can do that, IMO. And they must have access to funds so they can buy more equipment and hire more miners for 3 shifts, too. I’m summarizing, and this info I read may be full of holes. However, once the high-grade assays are made public, they can keep it going strong with a big BOOM to our PPS once they are fully prepped. Made sense to me when I read it.

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PDAC 2022
“This will be followed by an online event on June 28-29. You may register at the PDAC site.”
(Notifications | AURYN Mining Corporation)

Has anyone signed up for this online event or know what it is all about?

Easy… it’s part of the PDAC session this year. In person and then virtual. It’s not an AUMC thingy

pdac.ca

OK - Just wondering why it was two weeks after PDAC ends, June 13-15.

Pardon the off-topic post . . .

One of our long time MP members, and personal friend of mine, @peter, has a daughter who is experiencing something far worse than what we’ve gone through with MDMN and AUMC. If you are in a position to help, I am sure it will be appreciated.

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Thank you for your prayers, positive thoughts and support. Indeed it is a parent’s nightmare. One I hope none of you ever experience. From my past experience with MDMN, there were several other members that had invested with the hope of some financial relief getting through this sort of crisis. I did not happen and hopes of financial relief were crushed. For those of you in the future, this is an entirely different situation. One with serious and grounded disclosure, one of a substantiated financial upside and one of fresh air unpolluted by the past.
Thank you for your positive energy and kind thoughts!
With the best and kindest regards to all.
Peter

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All the best and prayers to you and your daughter. TDK

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OK , Time for a reality check : 16 Months old

April 2019 – Shareholder Notification Apr 3, 2019

AURYN Mining Corporation (OTCMARKETS: AUMC) is pleased to report the following to its shareholders:
AURYN Mining Chile, SpA, recently completed the distribution of its AUMC shares to its shareholders.

January 2021 Shareholder Notification

Medinah Minerals, Inc. (OTCMARKETS: MDMN) (“Company”) is pleased to share the most recent news from Auryn Mining Corporation (OTCMARKETS: AUMC) with our shareholders.
[January 2021-Shareholder Update.pdf]
Medinah Minerals, Inc. owns 16,104,200 common shares of AUMC received from AURYN Mining Chile, SpA. These shares are currently restricted. The Company intends on removing the restriction, selling a small portion of its shares to satisfy corporate liabilities and legal expenses, and allocating the remainder of its AUMC shares to its shareholders, pro rata, in the form of a dividend payment. This is subject to a final recommendation by our securities attorney and approval by regulatory authorities.

The timeframe for these actions is to be determined and is based on the Company’s desire to maximize the number of AUMC shares it is able to retain and allocate to its shareholders.
Submitted on behalf of the Board of Directors

**The allotment of shares must be communicated within a stipulated time.**
Allotment of shares must be done with the requirements such as minimum subscription, board resolution, etc.
*As per the law, the reasonable time is 6 months which means there should not be more than a duration of 6 months between application and allotment of shares.*
The allotment of shares should not contain any condition precedent to it. It should be absolute and unconditional.

Any argument regarding the “price” of AUMC, trading volume, etc. is MUTE.

Shareholders are OVERDUE ! I could not find ANY instance where a company purported a share distribution of share assets the took longer than 6 months.

We own these AUMC shares. We shouldn’t we be in possession of them, period. Allowing someone else to dictate When we get those shares is criminal ! Why is it up to them ?

Rod

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Couldn’t agree more!!!

Rod,
I’m not an attorney and don’t pretend to be. The Shareholder Notification you quote clearly states, “These shares are currently restricted.” Furthermore, " The Company intends on removing the restriction, selling a small portion of its shares to satisfy corporate liabilities and legal expenses" … The restriction is not yet removed or announced and "the remainder of its AUMC shares to its shareholders, pro rata, in the form of a dividend payment.". The shares will be distributed as a dividend of MDMN to shareholders. It not an allotment as far as I can tell in the legal sense that you may be misinterpreting or misquoting out of context. If it is truly a dividend, the restriction needs to be removed and a portion used to " to satisfy corporate liabilities and legal expenses" which has not been announced either. Generally speaking:

How a Dividend Works

A dividend’s value is determined on a per-share basis and is to be paid equally to all shareholders of the same class (common, preferred, etc.). The payment must be approved by the Board of Directors.

When a dividend is declared, it will then be paid on a certain date, known as the payable date.

Steps of how it works:

  1. The company generates profits and retained earnings
  2. The management team decides some excess profits should be paid out to shareholders (instead of being reinvested)
  3. The board approves the planned dividend
  4. The company announces the dividend (the value per share, the date when it will be paid, the record date, etc.)
  5. The dividend is paid to shareholders
    (Dividend - Definition, Examples, and Types of Dividends Paid)

EZ

First quarter 2022 MDMN liabilities are $$378,952. AUMC closing price on friday was .90. The average number of AUMC daily shares traded is less than 2,000. The bid for AUMC shares on friday was .60.

If MDMN gets authorization to sell AUMC shares to satisfy its obligations, they will have to sell 947,000 shares at average price of .40 ( which is optimistic when the current bid starts at .60). The final price will more than likely be in the .30 range.

So what did we accomplish? MDMN liabilities are paid off. AUMC shares get distributed. AUMC now has a market cap of approximately $21,000,000 versus $63,000,000 before distribution.

If you owned 1 million shares of MDMN before distribution your value on Friday was $2,500. After the conversion you now own 4,700 shares of AUMC including the dilution impact. Those 4,700 shares are now worth say .30 each or $1,410. You just lost 56% on the value of your holdings.

Also, Mauricio might have pledged his shares of AUMC as collateral against monies he might be borrowing to fund the exploration. If this is the case, due to the collapse of the share price he could be in trouble with his lender.

Let’s not force the issue to act just so that things get completed. Lets act when the time and circumstances will benefit all of us in a positive rather than negative way.

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