Baldy,
You are surely so correct in your prescience! I wonder what your comments over the past 16 years would have looked liked when the Fruta Del Norte mine was essentially devalued down to zero and on the edge of bankruptcy. No, I’m not directly comparing the Fortuna and ADL projects to the Fruta Del Norte, but investors certain had many years of disappointment while holding on to a bare thread of hope that a mine would finally be developed. The comparison fails because Fruta Del Norte did everything by the book with drilling through prefeasibility, whereas Auryn Mining has adapted to a very storied past and is presently embarking on a very promising future in a very nontraditional way. Below I recount the tortured past of a great discovery that took many years to become the mine it is today. This also demonstrates that nothing is certain in mining, but some things are worth waiting to see how they turn out, especially with deposits that show very promising results. Fruta Del Norte is an interesting story that is not just unique to what the investors of Cerro Dorado, Medinah Mining and now Auryn Mining Corporation has experienced over the past 16 years or so. I wonder how you would have commented on the Peruvian mine since it’s discovery? Would you have been encouraging patience to investors? These are just excerpts from a couple of accounts, the links of course reveal much more:
This one is 5 years old:
Fruta Del Norte – The Canadian Junior Exploration Industry in a Microcosm
( Andrew WatsonMarch 19, 2015 - Last Updated: October 17, 2019)
…As mentioned above the discovery and subsequent history of the Fruta Del Norte deposit was a microcosm of the promise of the industry, and it’s fall from grace. The deposit was discovered by Aurelian resources in 2006, testing a blind Induced Polarization anomaly which had been passed over at first to look at other mineralization. Down to the last few dollars in the treasury, 3 holes were drilled in early 2006 with two intersecting only alteration and the third hitting 237 metres of 4.14 g/t gold and 8.5 g/t silver. Patrick Anderson Aurelian’s president at the time takes up the story “ We were nearly out of money…We had no audience. The phone calls weren’t being returned. That was very frustrating,” …. “I checked (the assay results). Re-checked them. Called up the lab to make sure there weren’t any errors,” Anderson recollects. “I was terrified, terrified that we screwed up somehow.” (from an interview in Mining Markets May 2009). It was not a screw up and the market reaction was instantaneous and rapidly propelled the stock up from under a dollar to over $40 in a few months. From this wild visions of wealth began to grow in people’s eyes, as Patrick Anderson tell it “ There was this 200 Club group of shareholders who were all going to hold on until the stock reached two-hundred dollars. They had sold themselves on this dream of another rocketing share price…. ” There were other more serious players who saw a gold mine as well. In early 2008 the Ecuadorean government introduced a 70% commodity based windfall tax, and revoked hundreds of concessions. It then followed that up by suspended all exploration and development across the country to give it time to formalize a mining law. This had a chilling effect on the stock price to say the least…
…In 2008 amid much acrimony the gold mining major Kinross acquired Aurelian for $1.2 Billion dollars, and set about the arduous task of negotiating with the Ecuadorean government to develop the deposit. Despite coming close in 2011, a collapsing gold price, the intransigence of the Ecuadorean government, and overextension elsewhere put Kinross in an unworkable position and facing severe retrenchment, they walked, writing down the deposit to $0 and taking a $720 million hit to the balance sheet. They also pitched their CEO out the window for good measure. At the time it was symbolic of the many ills plagueing the mining industry.Fruta Del Norte, is one of the largest, highest grade undeveloped gold deposits currently in existence and was also the single most exciting exploration success story since of the new millennium. It had all the ingredients that make Junior mining so seductive, a massive high grade gold-silver discovery in a remote jungle, a wild ride on the stock price from $0.40 to over $40.00 and a takeout by a major at a premium. It also epitomized the crash with a greedy government bringing in a huge windfall tax, massive writedowns, following the collapse of the commodity prices, and final the shelving of the project for the foreseeable future and a 10 Million ounce gold deposit being valued at $0. Now like a phoenix the deposit has risen from the ashes with a new team and new optimism.
(Fruta Del Norte – The Canadian Junior Exploration Industry in a Microcosm | Geology for Investors)
This is a little more recent:
Fruta del Norte exceeds 2020 production guidance
( [MINING.COM Staff Writer](MINING.COM Staff Writer, Author at MINING.COM | January 12, 2021 | 6:15 am)
Lundin Gold (TSX: LUG) reported that its Fruta del Norte mine in Ecuador produced 96,830 ounces of gold in the fourth quarter of 2020, and total output since the operation was restarted on July 1, 2020, reached 191,080 ounces.
According to the Canadian miner, the grand total for 2020 adds up to 242,400 ounces of gold, accounting for what was produced from the moment Fruta del Norte reached commercial production on March 1, 2020.
“The grades mined, recoveries and average throughput were all better than expected during the fourth quarter. This enabled us to exceed the upper end of our gold production guidance of 170,000 ounces for the second half of 2020,” Ron Hochstein, Lundin’s president and CEO, said in a media statement.“I am very proud of the operational results the team achieved during a challenging time, which included a 15-day blockade of the road to Fruta del Norte.”
Hochstein emphasized that the company is now focussed on continuing to optimize its operations and moving forward with the $18.6-million expansion project, which will take throughput from 3,500 to 4,200 tonnes per day over the life of mine and would be funded by cash flow from operations.
Located in southeastern Zamora Chinchipe province, the 70,000-hectare Fruta del Norte operation is considered one the largest and highest-grade gold projects in the world currently in production.
For 2021, it is expected to produce between 380,000 and 420,000 ounces of gold at an average head grade of 10.4g/t, a recovery rate of 90% and all-in sustaining costs of $770-830 per ounce.
(Fruta del Norte exceeds 2020 production guidance - MINING.COM)
I present the above accounts, Baldy, because they are not only interesting, but because I like mining stories that show through hard work of successive managements that perseverance and a don’t give in attidtude can accomplish great results. I agree we need to wait and see results, but let’s not give up on current accomplishments just because they are taking longer than expected.
EZ
Keep it coming boys.
I’m hoping they are higher, of course.