Auryn/Medinah - 2023 1st Half General Discussion

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Honestly, I’m somewhat conflicted on this WIZ. I’m not so sure he’s not at least tangentially responsible for the delaying of Hochschild fulfilling obligations under it’s earn-in option on the LDM. In April 2019 it was reported Hochschild started Phase 1 of which included an IP program. in July 2019:

Progress continues at the Altos de Lipangue mining district. At Las Dos Marias, Hochschild Mining plc has advanced studies by completing 6 kilometers of IP Geophysics. Results are pending. With this information there should be suitable understanding of the target to develop a more advanced next stage of exploration.

Thereafter, it appears Hochschild stalled further work to advance the option by the following request reported in the 2020 annual report:

Hochschild did not perform any drilling however recommended the Company should undertake a 3-hole exploration drill program in order to evaluate the potential or lack thereof of mineralization.

It is reasonable to conclude that those making this request were aware that Auryn’s finances were prohibitive to fulfilling this request. Two sources report Isac Burstein is currently serving Hochschild Mining as “the Vice President of Business Development and Exploration at Hochschild Mining , where he has implemented an exploration strategy based on earn-in JVs and outsourcing most of the work to partners.” He is not, however, listed on the BOD of Hochschild.

While Mr. Burstein may not have directly made the recommendation for AURYN to drill, it appears someone on his outsourced team may have. I concur with jak167, there is an apparent conflict of interests here. It may even favor Hochschild’s potential future interest in the LDM over other possible JV suitors. If the current work on the Fortuna is highly favorable by year’s end, will there be renewed interest on the potential resources at the LDM? I do question the propriety of Mr. Burstein on AURYN’s BOD because he may be more instrumental in allowing Hochchild to extend it’s original option contract beyond it’s termination date scheduled to end later this year. While it’s desirable to have a JV partner participate in the development of the LDM as soon as possible, the choice of a partner should remain competitive and unbiased.
EZ

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It will be interesting to see how their compensation is structured. Will there be further dilution? Or, will their pay be a percentage of future production, thereby encouraging them to PRODUCE? Just asking. I value people’s work, but one of the huge ASSETS we have here is the fact that there will only be (I think) 80 Million Auryn shares issued and outstanding - even after the Medinah conversion.

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What is the conversion rate for MDMN to AURYN?

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Wiz, do you state a fact or opinion? It seems like you state it as fact, but it contradicts the publicly announced and filed facts from Auryn.

https://aurynminingcorp.com/auryn-mining-corporation-signs-binding-loi-with-hochschild-mining-plc/
https://aurynminingcorp.com/las-dos-marias-project-update-2018-10-07/
https://aurynminingcorp.com/december-2018-shareholder-update/
https://aurynminingcorp.com/april-2019-shareholder-notification/
https://aurynminingcorp.com/july-2019-shareholder-notification/

“The Company signed a binding Letter of Intent (“LOI”) with Hochschild Mining PLC during 3rd Q 2018, for the Las Dos Marias (“LDM”) project. Hochschild performed various field works and an IP Geophysical survey. Hochschild did not perform any drilling however recommended the Company should undertake a 3-hole exploration drill program in order to evaluate the potential or lack thereof of mineralization. The Company is exploring opportunities to raise funds to complete this drilling program, in the way of private financing, equity, share issuance or rights offering.” Cited from Auryn’s 11/14/22 Quarterly Disclosure, bottom of page 4 https://www.otcmarkets.com/otcapi/company/financial-report/351564/content

They had an LOI in August 2018 with a 5 year term and then signed and contract in December 2018 with the same terms. The other announcements deal with Hochschild’s work. They’ve disclosed the existence of it in their 11/22 Quarterly Disclosure. And, I do not see any other Auryn announcements or filings indicating the contract has terminated. The December 2018 announcement a little vague because it doesn’t state the end date of the contract just that it has the same terms as the LOI. So the end date of the agreement can be either August 2023 or December 2023.

Unless you can provide another publicly announced or filed source which shows the termination of the contract, I have to go with the fact that Auryn has a current contract with Hochschild.

So, to reiterate, I have a concern about a conflict of interest, unless others who have more experience in the mining industry can explain to me the common practice of these types of conflicts and how a mining company protects against them.

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200:1 worst case

It will depend on how much debt Medinah has to pay off. My understanding is that they will sell whatever amount of AUMC shares out of their 16.49M AUMC shares to cover that debt.

So there are 2 varaiables, how much debt to pay off and what the AUMC shares will be trading at when they decide to dissolve Medinah. That will determine the remaining of the original 16.49M shares to assign to mdmn shares on a pro-rata basis.

I for one am also hoping that after the conversion, the empty MDMN shell will still be worth something to someone like the Baumann group and we can sell the otherwise worthless mdmn shares as a kind of a bonus!

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Great question to ask if anyone is going to the convention this weekend.

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No problem - you do you. I’m not concerned. Happy we’re in a different league. Some keep thinking that this is still LP, Dewy, Cheatem and Howe.

MC or AURYN Holdings or someone has advanced the company millions without dilution for several years and people still doubt what they’re seeing. We all could have had a markedly different position right now and yet here we are.

I get it. I understand the question everything. Abuse is tough to come back from and we were abused. But I am past it and will express gratitude. Plus, I know what I see.

::: Oh, the LDM and Fortuna (DL) are not the same and nothing they can get from Fortuna on their “non-contract” anyway. :::

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Of course there is a potential conflict of interest and H has not been a good “partner” thus far but this Burstein character could simply recuse himself from a vote on any deal or negotiations with H.

I’m the first to poke holes in all of the holes in this investment but you can’t complain about adding two legitimate members to the BOD. Sure, there are some optics issues with Burstein but take what you can get. Most respectable individuals don’t jump on the boards of companies if they don’t think there’s upside.

They will be issued options just like any other company would do for their directors but this is undeniably a step in the right direction and a refreshing break to the nonsensical predictions of 100gpt production. This is like a real world mining company development without the unicorn and rainbow discourse.

The only thing I find odd: typically H would request a board seat AFTER cementing a deal. I sit on the boards of many companies b/c its a mandate post providing financing so that I can have oversight and influence. Its odd to add a director BEFORE announcing a deal. With this in mind, I don’t see any relevance to the existing (or potential new) deal with H. My guess is that it expires and is just a coincidence. If Wizard jumps in and says the new director is a precursor to a deal, before a deal is announced, that is an odd sequence of events.

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No. Read what I have written; there is no contract in force; there is no conflict. I understand the financial disclosure is ambiguous, but the meaning is clear to me, and a conversation with management confirmed it. Long ago I posted as such.

This is the 2nd best news we have ever had and some people focus on silliness.

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OK. So you are referencing non-public information about the H deal terminating. Not a bid deal either way in OTC land but I would be suprised if an H biz dev guy was added to the Auryn BOD preceding a formalized deal with H. I would agree that today’s news should be viewed constructively.

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It is public information. From the disclosures:

The Company signed a binding Letter of Intent (“LOI”) with Hochschild Mining PLC during 3rd Q 2018, for the Las Dos Marias (“LDM”) project. Hochschild performed various field works and an IP Geophysical survey. Hochschild did not perform any drilling however recommended the Company should undertake a 3-hole exploration drill program in order to evaluate the potential or lack thereof of mineralization. The Company is exploring opportunities to raise funds to complete this drilling program, in the way of private financing, equity, share issuance or rights offering.

When I read that I asked why would we explore opportunities to raise funds if Hocschild had the option, and in fact, obligation to invest, drill and explore. Is the proper reading of this “did not peform . . . however . . .” mean the contract is no longer in force. It makes no sense otherwise. I was told my interpretation is correct.

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Wiz, it’s not me doing me. I feel we should work with the publicly available info and avoid opinion stated as fact. I feel a lot of us, myself included, got in over our heads with this conduct previously. I know you have communication channels others of us do not have. I appreciate the work you have done in the past with MDMN to right the ship and help get us to where we are now and your ability to assist all of us with information you have secured; however, I mentioned long ago, for myself, I would only work from facts. I value the opinions of those on this board, but I know they are opinions and I can believe them or use them in that vein.

Based upon your further posts, I will take it as your opinion no contract exists with Hochschild. I do not think Auryn acts the same as, he who shall not be named; however, Auryn has had ample time to properly notify us of material changes to Auryn’s business. They have done so in some areas, but they have not done so as it relates to Hochschild. They still have it listed as a contract. I have no way to judge the importance of the statements about Auryn needing to drill itself because I do not have the terms of the contract. Your opinion may be right that, in principle, the deal is dead because Auryn won’t front the costs for the drilling and Hocschild won’t exercise its options without the drilling. It’s an opinion that fits the lack of interest or activity from Hochschild, but until Auryn and/or Hochschild officially announce a dead deal or we have gone past the five year time period, then I have to take the contract as in existence.

IMO, you and Baldy are probably correct that both Auryn and Hochschild are letting the contract die a slow death because neither wants to take on the additional risk and costs of exploration. I’m fine with that outcome due to Auryn’s current status and the current mine workings.

I am also not only ok but thrilled with bringing on Mr. Burstein due to his experience in managing deals of this nature. I feel, based upon his listed experience, he can definitely help Auryn progress further and faster than what’s occurring now. he wouldn’t be employed by Hochschild right now if he didn’t know what he was doing; however, the fact he’s currently employed by Hochschild and on the BOD of Auryn concerns me as the ultimate expiration of the contract at some point in the future still doesn’t change the fact of the potential conflict of interest exists right now. I may be nitpicking at this point, but as an attorney, I make my living by nitpicking. If nothing happens due to the conflict, I would be the little boy who cried wolf, but if something weird happens with Hochschild, then not taking action now could raise breach of fiduciary issues with Auryn’s BOD.

As Baldy and I indicated, I would anticipate at the bare minimum Mr. Burstein recuse himself from any discussion, handling, or voting on anything relating to Hochschild’s contract with Auryn, but I feel more needs to be done. I feel Auryn needs to acknowledge the existence of the conflict and let us know what steps they have taken to mitigate the conflict; or, if the Hoschchild deal is dead, then let us know, officially.

Thanks again for the discussion. I appreciate Wiz, Baldy, and everyone else who posts here. I feel all of our different views help build a better picture of where Auryn stands right now.

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Hello jak167

I agree with some of your views here. But I’m perplexed by a few of your comments. You were burned, like the rest of us, when the crooks were in charge. So, because of that, you are still a bit skeptical. Ok, that makes perfect sense. You stated that you “would only work from facts.” That’s understandable too.

Your last few paragraphs were a little wild with speculation, though. :astonished: :grin:. I’m not poking fun at you, but you do have a few wild scenarios dancin’ around in your mind, IMHO. For example, I don’t see any factual mention of a conflict going on. So I’ll take that as your opinion unless I’m missing something. I believe Maurizio is intelligent enough to avoid getting burned by either appointee to the new BOD. And that’s only IF there even is anything deceptive going on.

I hope you’re going to the convention cuz there you can ask some of those questions and hopefully get solid answers. We’ll have more info very soon, regardless. I’m not worried. I’m waiting with excitement for the days & weeks ahead. Best of luck to you, jak167.

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Hey Jak… can’t hurt to email the company and ask. That’s where I would think you’d be getting the facts from that you’re looking for instead of here.

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Yes, I understand that in the legal ethics arena even the “appearance of impropriety” is frowned upon - and yes sometimes attorneys have to withdraw from engagements and/or cases because of it.

But I’m not about to believe that MC would prejudice his investment in Medinah Minerals by hiring people who he thought would run the company into the ground. This man has MILLIONS in this company - and wants to make money and is seemingly breaking his back to do it.

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Hi mrbubba and EZ,

In regards to the Hoch situation, how can you reconcile that maybe Kevin is right and from our point of view that particular deal with its various terms and conditions is indeed dead yet there has been no official notice of the termination of the deal? Remember that this deal is an OPTION CONTRACT WITH A DATE ATTACHED. The most likely explanation might be that from the point of view of the Auryn and Medinah shareholders, the deal is for all intents and purposes DEAD but for more practical reasons, Auryn has not put the contra-party into TECHNICAL DEFAULT yet.

Let the clock expire on its own and let the clock put Hoch into TECHNICAL DEFAULT. Hoch has been all over this mountain for the last 20 years, there might be a role for them to play later, don’t burn any bridges. They are one of the world’s pre-eminent underground vein miners. Auryn/Medinah has 5 more known main veins to go after and who knows how many might be discovered as developments proceed. Remember the 2 “monster veins” previously discovered located SW of the intersection point between the Antonino Adit and the DL2 Vein. They had superior surface grades and widths to the various other main veins.

I think we should let the Hoch situation sit off to the side right now and delve deeper into what is really going on now. Let’s look at Kevin’s recent comments and reverse engineer them. Upon the release of the news about the appointment of the 2 new BOD appointees Kevin said,

“Confirmation of DL at roughly 150g/t AU was our biggest announcement so far.”

What does this mean? It means that there was a lot riding on the corroboration of the assay results obtained showing the 164 gpt gold average detected in the channel samples taken from the DL2 intersection site with the Antonino Adit. Remember we already had 12 channel samples taken from the approximately same elevation level of the same DL2 Vein (about 1,840 masl) 100-meters to the NNW below the intersection of shaft A and level 2. What this tells us is that the 100-meter stretch between these 2 points, which is about to be mined, is likely to carry similar grades. From a more macro point of view, we also had similar “bonanza grades” at the 1,840 masl elevation across the plateau to the west at the Caren Mine/Merlin 1 Vein. Can we extrapolate that the other 5 main veins within this MESOTHERMAL VEIN SET next door to the DL2 Vein might share similar grade ore at the 1,840 masl elevation? Maybe, maybe not.

This “biggest announcement ever for Auryn/Medinah” also served to corroborate the 30 years of production records regarding the DL2 Vein averaging a 64 gpt SHIPPING GRADE which included the VEIN ORE itself plus the surrounding less well-mineralized wall rock found in the hanging wall and foot wall of the DL 2 Vein.

Kevin went on to say, “I think these board appointments are confirmation of that announcement and it is our 2nd most important announcement in our history. I am not being demeaning, but Isac Burstein 4 and Mark Dingley 3 are just a different caliber of individual than we have been able to attract before now.”

So, what does this mean? All of this corroboration of insanely high grades in the recent 2 sampling efforts at the intersection of the DL2 and Antonino Adit as well as the dozen channel samples taken 100-meters away in the same vein as well as the historical production records over the course of 30-years of mining directly led to the ability to attract two new BOD members with their qualifications.

WHAT ARE THESE INSANELY HIGH GRADES “PACKAGED” IN?

Many years ago, Maurizio came upon a fork in the road from a decision-making process point of view. He could take the much more commonly traveled right-hand branch and sell a truckload of shares at whatever level he could get and raise money and drill the heck out of the plateau and then hire a firm to perform scoping, pre-feasibility studies and feasibility studies. At the end of the day, he would have some fancy reports that may or may not successfully attract a major to take about half of the action of the projects in exchange for some financial commitments and their technical expertise. The share structure would have been a total trainwreck from the hyper-dilution induced by raising that much money.

The other branch of the road involved Maurizio taking all of the shareholders onto his shoulders, paying all of the bills involved in drifting a “production adit” to the location within the mountain directly below where all of these insanely-high HISTORICAL SHIPPING GRADES were generated. Having taken this path, at the end of the day the DREAM was to intercept insanely high-grade ore, having a production adit in place to mine this ore WHILE RETAINING 100% OWNERSHIP OF THE PROJECT AS WELL AS AN A SHARE STRUCTURE WITH ONLY 70 MILLION SHARES ISSUED AND OUTSTANDING.

Thus, this insanely high-grade ore is now “PACKAGED” in a corporate entity, Auryn/Medinah, with 100% ownership of the entire ADL Mining District, as well as a corporate share structure with only 70 million shares outstanding. Yes, the corroboration of these grades was indeed a VERY BIG DEAL that involved taking on a lot of risk (mostly bore by Maurizio), and successfully overcoming it. Now that you have this “PACKAGE”, it’s time to bring in the heavy artillery, in the form of human capital, to lever the “PACKAGE”. I think that Kevin characterized it very well by linking together the 2 most important press releases that Auryn/Medinah have ever made.

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I used to go every year (free to see the exhibitors booths), but then they started to charge & upped the rate every year.

The prices are outrageous unless you’re a company.

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Regarding my post of Jul 9, '22

"I’m still baffled by the fact that instead of spending so much money undergroud to find/follow the veins, why they didn’t just drill several/many shallow holes (cost would have been a small % of what is being spent now) to find the location of the main vein(s).

I assumed that the reasoning of going underground was to send their diggings to ENAMI, to generate some $, yet still no word on shipments / income / grade / tonnage sent, etc."

For there to be any interest forthcoming from a Major participating, drilling has to be done. In my estimate, they would have spent ~10-20% of what has been spent now drilling the shallow holes to CONFIRM their theories re: the veins. This would also have started to delineate a resource which EVERY potential partner would require.

Even disregarding partner participation, choosing to ‘glory hole’ the deposit is rift with potential complications & disappointments. (width, grade, excavating non-grade along with grade, vein ‘disappearing’ or being faulted to an unknown direction).

There are many instances, even with companies having a National Instrument 43-101 have found themselves in deep water,( PURE GOLD MINING a very good example).

My point is that caution should take precedence over enthusiasm. Even if AURYN can start producing (sending concentrated ore to ENAMI) minus the cost of transport & processing fees, to repay our benefactor will take, in my opinion, at least a year, if not 2 years. He has spent apparently a couple Million which he has to recover before AURYN sees any income.

Rod

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Yes, I agree. I’ve mentioned several times over the past couple of years the option on the LDM most likely will expire unexercised. I would expect that a formal official announcement of the technical default will be announced based on the signed option contract, which to my recollection, was not released. It is likely that Sillitoe’s internal report performed for AURYN was viewed by Hochschild in picking the location of the 3 targets as well as information from Ignacio Bustamante ( CEO of Hochschild), he said "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.

There’s some pretty good information from the past why these areas are not currently exposed. Jim, I think you had communicated last year that “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.” There was additional exploration performed on the LDM (NUCO) 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. The option was entered into in good faith after considerable DD. Circumstances in mining are always subject to change.

Hochschild had other more lucrative opportunities that arose with some immediate expenses encountered. Hochschild Mining completed a spin out of Aclara, a Chilean rare earth minerals unit. This occurred sometime 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. They were in no hurry to spend more money with all the other projects Hochschild is involved with. Particularly I noted the following:

On October 14, 2021, Hochschild Mining notified Skeena of its intention to take over as operator Snip and begin spending to earn 60% of Skeena’s interest in the Project. In order to earn 60% interest, Hochschild will need to incur expenditures of approximately C$100 million during the Option Period. After completion of the earn-in, a joint venture would be established between the parties, and Skeena would be entitled to anti-dilution protection of up to C$15 million.

I would assume Isac Burstein was involved in structuring the earn-in JV on the SNIP for Skeena, not a small project. BB, you had also indicated that there is good evidence of a supergene enrichment (SGE) stretching from the LDM on the northwest downslope off of the plateau all of the way over to the DL1 Vein. This presence of an SGE zone was supported by the presence of molybdenite, but also chalcocite at the LDM, just like bornite and covellite do. If results on the Fortuna are impressive enough, I expect Mr Burstein may very well be instrumental in structuring an earn-in JV from any one of our assets including the LDM, Caren Vein - adits 1,2 &3 /Larissa adit, and/or Pegaso Nero. I think we are in very good hands! At the risk of repeating myself, I think with the addition of Isac Burstein and Mark Dingley to the BOD we are embarking on a new level of exploitation to mine :moneybag: :money_mouth_face: :moneybag:
Grateful for Maurizio’s continued support and the addition of our two new BOD members!
EZ

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Let’s end this week with a bang bang bang

Further metallurgical testing is ongoing to determine the most effective processing methodology.

Stay tuned!

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