Overall excellent analysis Jim. Thank you, Thank you, Thank you! You’ve been telling us this stuff for many years in various ways, but never in such detail as you just went over things this morning. Also thanks WIZ for the much improved resolution in the map image you posted. A couple of things come to mind that are rather something I’ve been pondering. Where did all that copper arise from, and how much more of it is there? Yes, I wonder if the answer is somewhere in the PN, but that will have to wait a very long time to find out. Of closer importance in the timeline for production how much ore can be hauled to Enami above that 25 gpt cutoff grade to capture byproduct credits and reduce the processing fees? At some point (when?) can lower grade 15 gpt ore be mixed with the higher grade ore from the DL vein to increase the tonnage being processed at Enami and still capture the by product credits? What will need to be done 1st to accurately perform the mixing of ores to accoplish this? Just a couple of things I’m pondering and quite excited about ( typos corrected 
).
EZ
Hi EZ,
I think you’re worrying too much about Auryn receiving by-product credits for the copper. If it’s extremely low- grade copper like the 0.2% Cu SMFL found at surface, then it is my understanding that Enami will only pay for it if you have gold with grades exceeding 25 gpt which SMFL easily exceeded.
Enami has its own threshold limits for copper. It’s set at 2.5% Cu whether it be “soluble” copper (copper oxide) that is soluble in sulfuric acid or insoluble copper (copper sulfide) that needs to go to a flotation circuit. If you exceed the 2.5% threshold, you’re good to go.
The average copper grade being mined worldwide today is about 0.8% copper. Not too many years ago it was 1.6% copper. The problem is the lack of new discoveries. So, the majors are going deeper and deeper after lesser and lesser grades of copper. If a deposit is blessed with a supergene enrichment (SGE) zone with a bunch of that bluish-colored bornite we keep seeing, then they’ll mine that first.
The good news is that these SGE zones are often huge. They’ll usually extend for a couple of hundreds of meters in thickness and laterally they can extend for many, many miles. But when they’re mined out, they’re gone. When that happens the grade that the major is mining falls off of a cliff. The grade of the copper in an SGE zone averages about 6-times that of the regular old “hypogene ore” i.e. usually chalcopyrite which is 33% pure copper. The 3 main forms of copper in an SGE zone are bornite at 63% Cu, covellite at 66% Cu and chalcocite at 80% Cu.
That recent 48-tonne shipment of ore by Auryn to Enami averaged 3% copper. Enami will take that and gladly pay for it all day long. Prior to that, the last copper grade we had in the Antonino Adit was 5.3% copper in one of the mineralized intersections. Don’t think for a minute that the majors haven’t noticed the bornite and the copper grades being found in the Antonino Adit.
I’m going to assume that there is a chess game going on behind the scenes. If the cash flow from the production from the DL1 Vein is as significant as I think it might end up being and if there is a semi-inexpensive exploration program that could substantially “de-risk” the Pegaso Nero from the point of view of a mining major, then I would think that Maurizio might want to take that step prior to cutting a deal for the Pegaso Nero. Majors will typically bully the heck out of the juniors at the negotiating table because the juniors typically have zero cash flow and need to pay their monthly bills by selling shares at ridiculously low levels while diluting themselves to death. If Auryn has a viable option to go it alone for a little while longer at the PN then should the price of copper continue to trend upwards with all of this “electrification of the world” and “zero carbon emissions” policies kicking in then it might pay handsomely. When you pair up no new copper discoveries, dwindling reserves on the balance sheets of the majors and with very few SGE zones still being mined, then I would think that time is on Maurizio’s side. Today we saw BHP throw $79 million at Lundin’s Filo del Sol copper-gold project NE of the ADL up high in the Andes.
EZ, you asked an interesting question when you asked where did all of that high-grade copper come from. The answer is that it came from the areas right above where it is being found now. Here’s a link to a paper that explains “supergene enrichment” in layman’s terms:
In a sense, there are two types of gold-copper or copper-gold deposits. There are those with a lot of that bluish-colored bornite indicating “supergene enrichment” and those without it. A while back, I cited that all of that SHINY YELLOW STUFF (SYS) whether it be pyrite/”fool’s gold”, actual gold or chalcopyrite (copper plus gold) is good stuff.
Pyrite isn’t mined for its iron or sulfur contents. Its presence is critical to create SUPERGENE ENRICHMENT ZONES. Pyrite contains iron and sulfur. When it gets “oxidized” by the oxygen dissolved in rain water, the iron atoms get converted into an iron oxide/hydroxide called “limonite”. You can see this yellowish-brownish rusty-looking stuff all over the place at the ADL. The sulfur atoms from the pyrite join up with water molecules to form a dilute solution of “sulfuric acid”.
The sulfuric acid changes near surface copper minerals from “sulfides” to “sulfates”. “Sulfates” are soluble in these fluids. They get dissolved and drift lower in the rock structure until they hit the area right under the historical water table. There they accumulate into regions of very high-grade copper known as chalcocite which is 80% Cu. This is that grayish stuff you see near a lot of the bluish-bornite shown in the photos. Geos refer to these regions of highly-concentrated chalcocite as “chalcocite blankets”. These can be enormous. Why is this? It’s because over the 91 million years that this deposit has been forming the water table has been located at various levels below the surface which is constantly eroding. In regards to the seemingly non-stop supply of all of that SHINY YELLOW STUFF that the miner’s head lamps are nearly blinding us with, the PYRITE/”fool’s gold” is actually wonderful to have around. NO PYRITE, NO BLUISH-COLORED HIGH GRADE BORNITE AND NO SUPERGENE ENRICHMENT ZONES.
As you study the photos in the “gallery” portion of the Auryn website, what jumps out at you? It’s all of that SHINY YELLOW STUFF and the BLUISH-COLORED BORNITE.
DON’T FORGET THE “SPLIT SCREEN” APPROACH TO DOING DUE DILIGENCE ON A MINING INVESTMENT LIKE THIS
On the left-hand portion of the split TV screen, you have the gold and copper discoveries, the SGE, the historical production results at the DL1 Vein, etc. But don’t forget the right-hand part of the TV screen. These mineral assets exist within a corporation that has a certain amount of SHARES OUTSTANDING (only 70 million) tucked within a certain (extremely tight) SHARE STRUCTURE. Untoward dilution in the SHARE STRUCTURE during a timeframe in which many juniors need to sell a lot of new shares out of the Treasury in order to fund exploration, development and the commencement of production, has been circumvented by management’s willingness to fund these efforts with interest free cash advances. I’m not sure which half of this split-TV screen is the most impressive but I do recognize that the COMBINATION is rather impressive.
A couple of unbiased questions:
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If Enami would gladly pay for the copper byproducts “all day long” why didn’t they for the past two truckloads? I would guess that they need to have significantly more volume before negotiating the copper payments but that’s only a guess. It’s not guessing when stating that they aren’t currently receiving payment for the copper.
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Given all of the attention that the majors “must” be giving to AUMC, why do you think that Hochshild has gone persona non grata? If you look at AUMC’s PR’s from 2018 and 2018 they were centered around this JV. Wouldn’t you think that H would be putting a bit of money into the project if the progress and attention you speculate upon is actually occurring?
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Considering the amount of grief I receive for trying to paint a more objective (occasionally negative) analysis on this investment, don’t you think it may be wise to rein in some of your unbridled generally delusional, optimism given the pace of progress on the hill? Whether it be 20 years ago or last week. Maybe wait for the company to produce something more than two truckloads of ore, or find the elusive DL Vein after 15 months of trying, before making predictions that the majors are lining up for the action. It’s fun to dream but have a little sense of reality my man, especially given the the performance over the the 3 let alone 30 years.
Split screens, chess games, ATM dividend machines…
At the very least, leave a little room for upside for when the company actually lands on the moon. We’re still working with paper airplanes.
BB,
Thanks for the additional information on what Enami requires for receiving by-product credits.
Also, I appreciation the brief lesson on SGE formation pertaining to 80% Cu typical of chalcocite, and other high CU ore concentrations like bornite and covellite. This SGE formation requires a water table above the supergene area. It surprised me that it is formed from the oxidation of the leached cap under certain conditions and the formation of hydrochloric acid leaching through zones of abundant pyrite and lower grade copper sulfides. Equally informative, from the linked article you included, that although hypogene enrichment zone areas may be very large covering many square miles, the high content supergene enrichment blanket is quite thin and may only be 10-100 feet thick. The main economic ore body of non-enriched primary sulfide mineralization is huge, deeper, and usually only a few tenths of a percent CU.
From Howe’s report No. 0024 (1999), just from an additional background information perspective, I found this excerpt kinda’ interesting:
Howe is not aware of any further mining activities that have occurred at the Fortuna Mine (except for the most recent rehabilitation program initiated by CDI (see below) and based on the information reviewed by Howe for this report it is believed that the extent of the underground workings today are approximately as depicted on Figure 5.3.
Personal communication with Clarence Thomason, CD’s operations manager, revealed that the mine went through several ownership changes since the 1970’s, the last of whom permanently closed portions of the mine by blasting and caving the access tunnels. His reasons for this are not known but it is presumed that it was concerning domestic financial quarrels. Any further exploration completed since the early 1970’s has been in the form of surface trenching or mapping and sampling as described below.
Changing the subject a bit, I don’t think it’s important for now whether Hochshild does much of anything with the LDM. I was only recently aware of the fact that Hochschild Mining completed a spin out of Aclara, a Chilean rare earth minerals unit. This occurred after their LDM option with AUMC. It was in October 2019, Hochschild purchased this Chilean rare earth deposit. Aclara remained as an independent business unit within the group until December of last year when the spinout was completed. After Auryn has a very successful mining operation on the Fortuna starting with the DL vein exploitation and associated veins/veinlets, Hochschild has until December 2023 to make good on it’s option. It would be great if they find the results on the Fortuna impressive enough that they continue their option before the option expires. If Hochschild doesn’t pick it up, the asset is still there, along with the Caren Vein - adits 1,2 &3 /Larissa adit and Pegaso Nero.
There was some interesting, information from the abbreviated Howe Chile Limitada report #0025 on the Los Dos Marias and Alto de Lipangue gold/copper properties August 2, 1999. The exploration on the Las dos Marias was preliminary and very limited. Unfortunately, much or the early DD on the LDM had inadvertently been “lost” earlier on our thread in this forum. I seem to recall there was additional exploration performed on the LDM that shareholders were promised to receive, but for some reason it was never revealed. Likely it was treated in similar fashion as Dr. Sillitoe’s report and used for internal purposes and presented to Hochschild under an NDA for consideration of their option. BB, in one of your posts you said, "Recall that Bustamante over at Hochschild commented that “there’s some pretty interesting geology over at the LDM”
From report No. 0025:
Medinah’s Lipangue and Dos Marias Properties represent excellent targets to host large tonnage, bulk mineable gold and/or copper (+/- silver) mineralization at relatively shallow depths, and these targets remains open in most directions and could be larger in extent than currently exposed.
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… excerpt from this same report 6.2.1.1 Shear Zone Hosted Gold Mineralization (bolding highlights mine):
Further down the hole a significant fault/breccia gouge zone was intersected between approximately 66 and 73 metres. Core in this interval was extremely broken and sections of zero recovery were reported on the log (however percent recovery logs were not attached). Analytical results of two, one metre samples taken by Medinah across the interval between 68 and 70 metres yielded 61.77 and 122.2 grams gold/tonne, respectively and together created a weighted average of 91.99 grams gold/tonne across 2 metres. A quarter core repeat sample by Howe (sample number 51880) of the interval between 69 and 70 metres (repeating Medinah sample 347182) returned a spectacular 455.02 grams gold/tonne (see Table 6.2 and Plate 5.14). This interval consisted of a strongly brecciated fault zone with intense clay-carbonate-sericite alteration and 1 to 5 % disseminated pyrite and traces of molybdenum and chalcocite. No visible gold was seen in the core, however based on the extremely high gold values in this interval, it would not be unexpected. The extreme variability between the two samples indicates the inconsistent, and probably nuggety nature of the gold mineralization in this fault zone. Similar to the interval between 41 and 42 metres, the core in this interval was extremely fractured and broken and although core recovery logs were not included, Howe feels that the recovery in this interval may have been below average, and the resulting analytical results should be interpreted with care.
My question BB, how related is the geology of the LDM similar to what is being found at the Fortuna?
How related is the geology found over in the Caren mine to that in the Fortuna?
Hi EZ,
In regards to your question: “How related is the geology found over in the Caren mine to that in the Fortuna?”
These are both members of the same “Mesothermal vein system”. The biggest difference would be the width of the surface zone of argillic alteration at the two veins. At the Caren, it’s measured in inches; at the Fortuna, there is a 200-meter width of argillic alteration. From a practical point of view, I’d say that there is a better chance of having a small portion of the Fortuna/DL1 Vein area amenable to open pitability than at the Caren Mine. It still might be a long shot. It all depends on the density of the veins near surface especially near where the Merlin 3 converges in on the Fortuna Oeste and Fortuna Centro veins.
We need to keep in mind that the erosion levels at the Fortuna Centro/DL1 area are about 45 meters lower than that at the Caren Mine. The textures of the vein at the Caren is remarkably intact with the banding showing and the presence of breccia carbonates and chalcedony. We dodged a bullet there because this is old rock (91 million years old) and the erosion could have been a lot more severe wiping out the “boiling zone”.
What’s interesting is that the “bonanza grades” at the two various veins i.e. the Merlin 1 and DL1, are at similar levels from an elevation point of view. Different vein members of a “mesothermal vein system” just happen to behave in a similar fashion. You’ve got the same underlying magma chamber that housed the hydrothermal fluids and gases, you’ve got the same tectonic regime involving subduction and extension as well as transpression. The same underlying rock formations are involved i.e. the Veta Negro and Lo Prado formations, etc.
The Caren/ Merlin 1 Vein area looks real good from a supergene enrichment zone point of view. Recall at the Merlin 1 surface you had all of those quartz-hematite-“boxworks” present. In a “boxwork” the rock has a lot of vacuoles like a sponge wherein something is clearly missing. What’s missing are the minerals dissolved by acids created from the oxidation of local pyrite. The missing copper is simply piling up below the historical water table in the form of chalcocite which is 80% Cu. It’s kind of nice when “Mother Nature” concentrates the desired metals for you.
With “old rock” like this, over the course of 91 million years of formation, the water table has been all over the place from a vertical orientation. You’ve got “uplifting” forces from below and erosion and weathering forces active at surface. This has a tendency to give you nice thick SGE zones. Even young deposits like El Teniente, which is “only” 8 million years old, have super thick SGE zones. At “El Chuqui”, which is a relatively young (33-million-year-old) monster porphyry system, the thickness of the SGE zone is over 750 meters.
The LDM and the role of Hochschild is a bit of a head-scratcher. They had a preliminary deal and then Hoch asked for an extension to do more due dili. They ended up re-logging all of the drill core from prior work. After completing that their BOD gave a thumbs up and they entered into a JV with Auryn for the LDM. So, the LDM passed some pretty good scrutiny up front.
Then things got quiet and it appears that Hoch was just “sitting on” the option which is something an Auryn-like junior never likes. Clearly, the intent was honorable at least in the beginning because they spent a lot of time and some coin on due diligence. Hoch has been around the ADL with their ears perked up for a very long time. We learned at the informational meeting in Las Vegas, that Hoch was not interested in doing business with Quijano and that he had to be clear of the scene before they would get involved. Those at the meeting might remember some comments on a certain NYC law firm that was involved.
It appears that Hoch was pretty much sitting on their hands until we saw a PR stating that Hoch wanted Auryn, at Auryn’s expense, to do 3 drill holes at targets picked by Hoch and Sillitoe. This caught us shareholders off guard but the PR said that Auryn management is thinking about doing just that. I’m going to assume that if good results came from this mini-drill program that the terms of the previous deal would obviously be amended. So, whatever Hoch did while being so quiet, they, and Sillitoe, did identify 3 targets worthy of drilling. I assume these targets had something to do with Hoch’s Bustamante telling the press that the LDM had some “pretty interesting geology”. I’m still confused about what actually transacted and I’d love to be able to peruse Sillitoe’s (“in house only”) report.
With Hoch being one of the premier developers of vein deposits via underground methodologies, I always thought they’d want a seat at the table for developing the mesothermal veins but I don’t think Maurizio is about to share the meso’s with anybody.
Thanks for reposting that information on the LDM. I think we all might remember that huge gold intersection in between the 68 and 70-meter levels. What I can’t figure out, is how you can have gold grades that high without there being “visible gold”. You’d have to have an awful lot of tiny gold specks below 0.5mm or so in order to rack up grades like that. At the Fortuna Mine we saw the same phenomenon, high-grade production results (64 gpt average over 30 years) and no visible gold. Similar to the tailings piles and dumps outside of the old Fortuna Mine, you’ve got over 5 gpt gold sitting outside of the old LDM mine in tailings piles and dumps.
Fast forward to today, and you’ve got visible SHINY YELLOW STUFF all over the place in the Antonino Adit sandwiched in by bornite (known to hang out with gold of grades averaging over 10-times that of the much more common chalcopyrite). We’ve all seen the pictures of the 6 gold nuggets on the Auryn website “gallery” with that dusting of “sooty-looking” silver sulfides. We’ve seen the grades of those 16 samples from the intersection of Level 2 and Shaft A.
The other thing interesting about the LDM is the presence of not only molybdenite but also chalcocite. Chalcocite is the “secondary” form of copper that indicates supergene enrichment just like bornite and covellite do. So now we’ve got evidence of SGE all over the place stretching from the LDM on the northwest downslope off of the plateau all of the way over to the DL1 Vein.
The same thing goes for the presence of molybdenite seen at both the LDM on the northwest downslope off of the plateau all of the way to the southern downslope near the intrusive and tourmaline breccias. Molybdenite is a super high-heat mineral. It’s found near the core of a porphyry system, usually way down deep. What’s it doing at surface where Auryn had all of those stellar sampling results during their “ridge crest sampling campaign”? Sillitoe wrote a paper in 1974 wherein he gauged the depth of the TOP of the average porphyry deposit. It came in at 1.5 Km to 4 Km. What in the heck is moly, which hangs out in the core of porphyries amidst potassium feldspar (potassic alteration), doing at surface near a bunch of “K-spar”?
What about that big ars tourmaline breccia sticking out of the ground on the southern downslope? This stuff is super high-heat. Tourmaline is different. It doesn’t erode, it’s stronger than the dickens. Just to the east of the ADL is the world class Rio Blanco/Los Bronces deposit. It’s composed of 7 tourmaline breccias.
We there yet? My kids are 13 I tripled down day they were born. I think I waited long enough….
geoly,
We’ve all waited more than long enough, and then some! No one said life would be fair, we just do what we can do as individuals. This has been the most disappointing and costly stock I have ever owned, but the fact is we are actually in the best position for success and reward for MDMN and AUMC (CDCH) in the last 13 years! Are we there yet, NO… But the day we will all have our distribution and see green is getting closer quarter by quarter. This year I’m looking to have this equity behaving as a spectacular stock worthy of investment. That is my 2022 wish for all of us enduring this journey.
EZ
Gold is looking great at $1973 right now. 
Well call me crazy Geoly, I bought more…$500 worth to bring my average buy price. Don’t ask what it is now.
TDK
I had a thought this morning that I can’t believe I haven’t had in all the time we have been here. I almost feel like a moron for posting it now after all this time, but here goes…
Why don’t we create a thread where we can pool our investing resources, (meaning a “brain trust”) so to speak, and share investment ideas and TA. We’re in some difficult times so why not work together to not only make some good investments but get out of or stay away from bad ones. I have been primarily scalping the markets over my career, but futures scalping this year has become a losing endeavor for the most part, and I’ve got more grey hair than I’d like at 53, so I’m moving toward swing trades and investments. I’m looking to keep a focus on energy/oil, gold/silver and a few etfs, primarily QQQ, SQQQ, TQQQ, and SOXL. I have access to some pretty good resources for swing trades and investments that I’m happy to share here, along with my charting skills. We could do it here or start an email group. Let me know what you think and if even a few are interested I’ll start a thread if it’s cool with The Wiz and the mod squad.
Hi Geoly,
If anybody deserves a home run out of this deal, it is you. I still recall how you fed a whole bunch of people out of one of your restaurants during the hurricane. I agree with Kevin when he cites that the upcoming intersection with the DL1 Vein is pretty much a “binary event”. That single event is going to launch a cascade of events putting Auryn/Medinah into the winner’s circle.
Between now and then, however, one might be able to keep her or his sanity by concentrating on recent developments and how they serve to bolster our chances for success. When they hit the DL1 Vein, the geoscientists and mining engineers are going to make a long list of potential exploitation sites based upon things like grade, width and proximity to the adit portal.
Recently, we hit an intersection featuring 15.8 gpt gold, 47 gpt Ag and 5.3% Cu. MAURIZIO OPTED TO TEMPORARILY BYPASS THIS INTERSECTION AND FURTHER ADVANCE ON THE DL1 VEIN. With today’s metals prices, which are on a total tear right now, that intersection represents $1,620 per tonne “rock”. THAT IS A HUGE NUMBER IN THE MINING INDUSTRY and Maurizio apparently said to himself, not bad, but we can do a heck of a lot better. He bypassed a chance to make a mini-fortune in the very near term.
From a value point of view, that intersection now becomes an OPTION. Auryn has the OPTION to chase down that particular vein, I call it the “June 23 vein” because it was discovered on June 23 of 2021, any time they want to. It’s a bird in the hand. This OPTION has value. The market doesn’t recognize this value. 99% of mining investors have never heard of the ADL Mining District. My gut feeling is that they won’t opt to go after that particular vein for perhaps as long as 10 years because their other options are going to be far superior.
I don’t sense that many people appreciate it yet, but we already have had a sneak preview of the area in which the Antonino Adit is about to intersect the DL1 Vein. It is the area where a team of Auryn geoscientists descended down the ladder of Shaft A where it intersected Level 2 of the “old workings”. They took 16 channel samples and the results were even higher than the stellar results that SMFL achieved in that same DL1 Vein over the course of 30 years of production i.e. 64 gpt gold WITH NO CONTRIBUTIONS FROM COPPER. Does “the market” know about this? Heck no. There have been no “audience development” efforts made to date. That will start when the DL1 Vein is successfully intersected and several working faces are put into production simultaneously.
Don’t lose track of the TIMING of this particular discovery. Everybody and their brother is about to be convinced that gold and copper are the place to be invested in with all of the events going on worldwide. The “green revolution” is going to put the price of copper into orbit and inflation is going to boost up the desirability of investments in gold. There haven’t been many new gold or copper discoveries recently let alone one with BOTH gold and copper. Hang in there, the cavalry’s coming.
We already have a thread for other mining stocks and one for non-mining stocks, but they have probably gone somewhat stale. Fine by me if you start a new stategy thread if the other mods and admins are.
Gold gapped up today and is ready to break the 2000 mark.
Well we broke 2000 and see that oil is $130 a barrel
5.56 NATO rounds gapped up to $0.5 today from a average of $0.44 ?
I wonder why?
Just seen on Twitter - something coming soon?
[AURYN Mining Corp @aurynmining]
(https://twitter.com/aurynmining)
We send out quarterly updates and special notifications as needed via email. To receive these sign up for our email notification list: http://eepurl.com/dFBgbD $AUMC
Rich;
Why not just use Other Mining Stocks ?
Rod
TheRod…
Yes, I think between the “Other Mining Stocks” and “Markets and Other Non Mining Stocks” we’ve already got it covered.
Gold making a huge run - if Auryn can come up with some good news, long-time MDMN investors just might get their money back and even be rewarded.
We should start a poll to see if Auryn will intersect the DL vein before next month quarter update
BTW Gold just set a new record intraday day high 2069
Just don’t make “next week” an option on that poll…