Auryn/Medinah - 2023 1st Half General Discussion

Re: all of this, one must understand how the gold is situated in the ore - that impacts the recovery rate, cost of processing, and (potentially) who is interested in buying it. See my previous posts.


And this was with archaic recovery methods. However it was likely that the rock was hand picked. So what do you realistically expect on bulk shipping basis with wall rock included?

Hi Jimmyp,

Sorry I’m so slow in getting back to you. I think that both the artisanal miners and Auryn will have done “hand sorting” prior to crushing. Clearly visually unmineralized rock will probably be discarded prior to crushing. Visually, the wall rock granodiorite looks like a granite countertop. You have that “salt and pepper” appearance with light-colored quartz and plagioclase feldspar and dark-colored hornblende and pyroxene crystals. It’s pretty distinctive. It helps the preliminary sorting process when the vein material is visually different than the wall rock material.

I’d think of the ore as always being in one state of “beneficiation/concentration” or another. After blasting the working face of an adit, you have on the adit floor “run of mine” (“RoM”) ore. As I understand it, that gets brought up to the plateau and is visually sorted as to mineralized versus nonmineralized. The visually-mineralized “sorted ore” gets thrown into one or more crushers until the size mandated by either the purchaser or that mandated by the gravimetric concentration apparatus for highest recovery rate is reached.

The resultant “comminuted ore” runs (or will run) through the chosen gravimetric concentration apparatus and the higher concentration material, found near the periphery of the centrifuge, goes into the high concentration ore pile and the other material into a less-concentrated ore pile. The highly concentrated ore often becomes “direct shipping ore” that is not in need of further purification prior to shipping. The less concentrated ore might need further purification and it could be headed to a “roaster” to oxidize the sulfides, to a “flotation plant” to remove the sulfides, or to a pressure oxidation (POX) facility or to a bio-oxidation (BIOX) facility. In essence, there might be a variety of “SHIPPING GRADES” heading down the hill, depending on what Maurizio opts to do on site and what the INTERNATIONAL MINERALS TRADER (if they become our partners) is equipped to do at their facility.

Recall that the University of San Sebastian is running tests for Auryn on “flotation” systems. Some MINERAL TRADERS have custom blending facilities and they will blend different grades of ore in order to maximize the ECONOMICS.

One of the key parameters for SHIPPING GRADES is what % of the working face of the adit is the EXTREMELY HIGH-GRADE VEIN MATERIAL versus less-mineralized wall rock. I’m pretty sure that the adits of the artisanal miners were narrower than those of Auryn. But the vein width in levels 0,1 and 2 was also narrower than the approximately 0.6 meters seen at level 3. There is a minimum width to the adits used by the artisanal miners because they had to get people and some type of equipment into and out of there.

With Auryn, the adits currently are about 3 to 3.5-meters in width and the same in height. You can see in some of the videos how that Cat 928 G wheel loader was barreling down the adit and you could see some adit width lateral to the bucket width which is 2.55-meters if that is the standard bucket they’re using.

What’s going to be interesting, is how much ore Auryn can remove WITHOUT BLASTING like they did up above in the “old workings” when they removed the 54-tonnes of 85 gpt gold material. If they can get in there and scrape away the vein material with a backhoe type claw, and remove that very high-grade ore and then worry about the wall rock on each side, that would be a good way to do some preliminary “sorting”. I’m guessing the granodiorite wall rock material will need blasting. I think they call this approach “split blasting”.

I feel more comfortable in NOT projecting the average SHIPPING GRADES now because I sense that the actual numbers aren’t too far away especially if they can choose and then install the MOST EFFICIENT gravimetric plant quickly. These aren’t that large and I believe most are portable. While constructing the now completed “gallery”, Auryn stockpiled 80-tonnes of MINERALIZED ORE but they mentioned that it hadn’t been “sorted” yet. So, “sorting” is part of the process for Auryn. With the given dimensions of the “ventilation/safety egress chimney” i.e. 30-meters in length and assuming the same width as that of the adit, there should be about 170 to 200 tonnes of just VEIN MATERIAL plus whatever amount of wall rock that doesn’t get discarded. So, between the gallery and the chimney ore, we’ll soon have somewhere around 20-or-so truckloads of ore (16.7 tonnes per truckload) to play with. That’s enough to get a good read on average SHIPPING GRADES.

I’m not sure if Auryn would ship this ore PRIOR TO gravimetric beneficiation or just wait until the “gravimetric plant” is delivered. If the ore is to be shipped to the “INTERNATIONAL MINERALS TRADER’S” facilities (should they be chosen as the partner), then I would assume that they’d want the ore to be treated first with the gravimetric methodology. The basic ECONOMICS centers around concentrating the ore on-site as best as you can inexpensively so that less worthless gangue that doesn’t earn any income, gets shipped.

Keep in mind that when dealing with these MESOTHERMAL VEINS, BOTH the width and grade will tend to increase with depth. That’s the only “leak” we’ve got out of the Sillitoe report. It said something like “like other mesothermal veins, the grades and widths are becoming more favorable with depth” (paraphrasing). Thus, the INITIAL SHIPPING GRADES might be expected to increase with depth DUE TO IMPROVEMENTS IN EACH OF THOSE 2 FACTORS-IMPROVING GRADE AND WIDTH.

It will be interesting to see, as the “decline spiral” opens up new sub levels for exploitation, how the widths and grades will be affected with depth. I’m hoping they will be sinking the decline spiral and “opening up” the various levels by punching a hole through the DL2 Vein “sheet of plywood” and then report back to us the grades and widths, before they start the mining process on those levels. If you accidentally intersect an “ore shoot” with screamingly high grades then that would make things interesting.

If a given sub level happens to have real strong widths and/or atypically high grades, I would assume that management will preferentially go after that level with a sense of urgency i.e. “high-grading”. In a scenario like Auryn’s, EXPLOITATION at progressively lower levels is also EXPLORATION except you get paid to do it instead of paying to do it. It also allows you to block out MR/MR. With those kinds of grades, you might be able to block out a lot of ounces of MR/MR fairly rapidly.

I’m going to assume that the METALLURGICAL TESTING will dictate what type of gravimetric methodology works the best with our ore. There will be a certain “MESH SIZE” post-crushing and pulverizing that brings about the best recovery rates. For the artisanal miners it was a “minus 200 Tyler mesh”. The artisanal miners had good results when they tinkered with different concentrating methodologies. A crude flotation system got their 64 gpt gold average SHIPPING GRADE up to 92 gpt gold. In 1970 they experimented with an undisclosed type of concentrating mechanism that got their 64 gpt figure up to 102.7 gpt gold.

Auryn has already played with a gravimetric concentration system and had “EXCELLENT RESULTS INVOLVING OVER A 90% RECOVERY RATE”. So, at least the DL2 ore has had a good history of being amenable to various “beneficiation/concentrating” methodologies but there’s always a certain fraction of the ore that might be “REFRACTORY ORE” that needs further treatment to separate the gold from the gangue (worthless material). A lot of the nuances of the DL2 Vein ore is already known because the mine has already produced 2,000 tonnes of ore over the course of 30 years.

Finding the offtake partner willing to pay the maximum amount can be a challenge. It sounds like Enami’s terms may have already been exceeded but who the heck knows who will table the best bid by the end of the process. Hopefully, there will be plenty of bidders for our ore at a time when few new sources of “concentrate” become available. A “gold/copper concentrate” could obviously be a hot commodity nowadays with the POG like it is and the demand for copper like it is likely about to become.

The good news is that at the end of the day, although the ore metallurgy is important, the ECONOMICS will be most determined by GRADE. There is no arguing that this is EXTREMELY HIGH-GRADE GOLD ORE. EXTREMELY HIGH-GRADE GOLD ORE tends to have EXTREMELY LOW ALL IN SUSTAINING COSTS (AISCs) to produce each ounce of gold within that “concentrate”. This translates into EXTREMELY HIGH-GRADE ORE TENDING TO HAVE EXTREMELY HIGH “MARGINAL PROFITS” PER OUNCE PRODUCED. ANY “REFRACTORY ORE” WILL HAVE A HIGHER AISC.

The way you might want to think of MINERAL ECONOMICS AS A FUNCTION OF GRADE is like this. Pretend that there is another junior producer on top of our plateau that is mining the worldwide average of 4 gpt gold ore from a different vein. Pretend that Auryn is cranking out gold with the same SHIPPING GRADE as the artisanal miners i.e. 64 gpt gold. (This is by no means a prediction but I want to be conservative.)

Let’s assume that the other miners have the same cost structure as Auryn, i.e. they pay the same wages, the same amount for diesel, explosives and electricity, the same amount for equipment and the same amount for transportation costs, etc. In other words, it costs the same amount (in TOTAL GROSS COSTS) for each company to fill up one truckload of ore and send it down the hill. The Auryn truck is going to have 15-TIMES AS MANY GOLD OUNCES IN IT because of the grade disparity. Compared to the other producer, THE ALL IN SUSTAINING COST to produce EACH OUNCE of gold in a concentrate form in those truckloads, will be MUCH, MUCH less for Auryn. The 2 companies will be paid the same amount PER OUNCE of gold delivered NOT PER TRUCKLOAD.

When it comes to the MARGINAL PROFITS per ounce produced, (the amount paid per ounce minus the AISC to produce an ounce) Auryn’s MARGINAL PROFITS will crush the MARGINAL PROFITS of that other miner. When it comes to calculating the TOTAL PROFITS of each company, Auryn will be able to multiply a vastly superior MARGINAL PROFIT PER OUNCE produced by a VASTLY LARGER NUMBER OF OUNCES PRODUCED in a given amount of time. THE CONCEPT OF BEING ABLE TO MULTIPLY A VASTLY LARGER MARGINAL PROFIT PER OUNCE BY A VASTLY LARGER NUMBER OF OUNCES IS A PRETTY POWERFUL CONCEPT.

If the Auryn operation also has a VASTLY superior ability to ramp-up production levels (in terms of truckloads of ore) i.e. “SCALEABILITY” because it was able to tap into a VASTLY superior ventilation and safety exit system due to producing immediately under the “old workings”, and they’re able to safely mine several sub-levels at a time, then………you get the picture.

I call this phenomenon “MINING MATH”. It doesn’t seem fair to the guys mining 4 gpt gold ore but at least they’re making a buck or two at these gold price levels. Another “VASTLY” you can add to that string of “VASTLYs” is the VASTLY improved price of gold when compared to the $35 POG present when the artisanal miners were doing their mining. The POG has gone up 57-fold since then. The reason most of us (speculators) are invested in this sector is because we’ve read about these 30- and 40-baggers that others have experienced. The reason there are 30- and 40-baggers in this sector is “MINING MATH”. The catch is, only the producers of extremely high-grade ore have access to “MINING MATH”.

From my point of view, Auryn is “IN PRODUCTION” as we speak. The “ventilation/safety egress chimney” is being constructed WITHIN THE DL2 VEIN MATERIAL. They’re mining the DL2 Vein ore while going upwards at a 20-degree angle to level 2 of the “old workings”, where the fresh air resides. The artisanal miners mining in the “old workings”, immediately above where we are today, were mining this same DL2 Vein or “sheet of plywood”. The way you tie into the 7 shafts and 5 chimneys within the “old workings” is mine your ways upwards through the vein until you hit a big cavernous system of empty “stopes”.

This “Ventilation/safety egress chimney” has a variety of purposes. The first is VENTILATION. The second is to provide a safety egress manway. The third is to provide PRODUCTION during its construction. The fourth is to provide “SCALEABILITY” because of its provision of ventilation and a safety egress manway. The commissioning of each of those future sub levels into production, should double, then triple, then quadruple, then quintuple the original production rates from the 2 working faces provided by level 3.

Oh sure, the production levels will crank up like crazy soon but, like Kevin tried to tell all of us a while back, the single most important press release made in the history of Auryn had to do with finally intersecting the DL2 Vein and the SUCCESSFUL CONFIRMATION of the original assay results received from the original sampling at the intersection of the Antonino Adit and the DL2 Vein. It seemed like an innocuous tweet at the time. What happened was that Auryn hit the TRIFECTA. They finally located that elusive EXTREMELY HIGH-GRADE DL2 Vein after thrice thinking they hit it but the geochemistry failed to confirm it. They also successfully corroborated the EXTREMELY HIGH HISTORICAL SHIPPING GRADES and they completed the PRODUCTION ADIT (the Antonino Adit) needed to transport the mined ore up to the surface.

Auryn had already reached one of the most critical milestones in any mining project. They had already submitted their BASELINE ENVIRONMENTAL SURVEY several years ago and got it approved. Much more recently they successfully finished and submitted their OFFICIAL MINE CLOSURE PLAN and got it approved by SERNAGEOMIN. And they also completed their DEFINITIVE MINE PLAN, submitted it and got it approved by SERNAGEOMIN. This led to their being granted their DEFINITIVE EXPLOITATION PERMIT.

The Chilean Mining Inspectors, after a recent unannounced inspection of the DL2 Vein project was successfully completed, reminded management to tie-in the completed “ventilation/safety egress manway” with the current forced air ventilation system once the “chimney” was completed. I would imagine that the official ALLOWABLE PRODUCTION LEVELS will be determined once the new “chimney” is signed off on.


In another 6 weeks or so (early July), we get an update - can’t wait to hear what they have to say.

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This answers my question. You think 64 gpt shipping grade is conservative.

How many tons at this grade is mineable conservatively?

Hi Jimmyp,

As far as projecting Auryn’s average SHIPPING GRADE at this point in time for the DL2 Vein project, I think the conservative approach would be to just wait it out and see what the average SHIPPING GRADE is for the ore produced during the construction of the “gallery” (80 tonnes of MINERALIZED ORE that was still awaiting sorting) and the ore produced from the construction of the “ventilation/safety egress chimney” which should be several times that amount. This is all DL2 Vein ore. What we don’t know is if this ore will FIRST be treated with whatever the most efficient and environmentally friendly “gravimetric plant” that the testing in Peru is trying to determine or not.

For those that don’t want to wait until that ore is shipped, if you wanted to place a bet on the “over/under” in Las Vegas for Auryn’s average SHIPPING GRADE, then I’d let HISTORY be your best guide. The first thing you’d have to define is “OVER WHAT TIMEFRAME ARE WE MEASURING THE AVERAGE SHIPPING GRADE”. In my opinion, the SHIPPING GRADE is likely to increase over time until it eventually plateaus out. The HISTORICAL AVERAGE SHIPPING GRADE achieved by the artisanal miners over 30 years of mining (albeit at a de minimis daily production rate), but totaling 2,000 tonnes of ore, was 64 gpt gold as reported by Enami. Enami paid them based on those grades. As I understand it, with Enami, these are “agreed to” grades. If Enami didn’t like some contaminant in the ore, they’ll dock you up front and the producer and Enami will “agree to” a lesser grade. I think that 64 gpt grade should be your starting benchmark for now anyways.

This wouldn’t be the case if Auryn were to commence production from some site distant from where the artisanal miners were doing their mining but thankfully Auryn is recommencing production at the same spot where the artisanal miners ceased operations. THIS IS THE KEY TO MAKING SHIPPING GRADE PROJECTIONS. Rarely does a party doing due diligence on a mining project have this luxury. My gut feeling is that “the market” doesn’t appreciate this fact, whatsoever.


  1. The artisanal miners mined a length of the DL2 Vein of about 350-meters to a depth of about 100-meters. In the top third of these “old workings”, the average SHIPPING GRADE was about 54 gpt gold. The middle third averaged about 64 gpt gold and the bottom third about 74 gpt gold. Auryn will be commencing operations at just below this bottom third. So, based on this, the case could be made that we should set the benchmark SHIPPING GRADE AVERAGE at somewhere around 74 gpt gold FROM AURYN’S UPCOMING PRODUCTION ESTIMATION POINT OF VIEW. These historical numbers make geological sense since the top of these hydrothermal structures, the “BARREN LITHOCAP” or “GOSSAN”, is, like its name implies, typically somewhat barren. Recall how the average grades of gold in the surface trenches was only about 3 gpt gold. In surface trenching, you want to determine if the veins are “gold-bearing” (auriferous) or not. Nobody expects high grades at surface. The next lower level in these hydrothermal structures is the “LEACHED ZONE”. Like its name implies, these levels are also typically low in grade because of the ACID LEACHING (from the oxidation of pyrite) of the contents of these zones resulting in dissolution of the metals and their being redeposited down layer in the structures.

The next lower zone is the OXIDE ZONE. Here you can start getting some decent grades plus the metal oxides found here are easier to treat than the metal sulfides found lower down. If the structure is lucky enough to have one, below this OXIDE ZONE is found the SUPERGENE ENRICHMENT ZONE or SGE zone. This is where the high-grade metals are often found. There aren’t that many SGE zones left in the world because the corporations lucky enough to have one tend to mine the heck out of it right from the get go. This is wonderful for the early shareholders but after 5 or 10 years the average grade is likely to go down. So, based on this, I would think that averaging a SHIPPING GRADE of 74 gpt gold (perhaps plus a bit) might be a CONSERVATIVE estimate.

  1. We are in a MESOTHERMAL VEIN system. These veins tend to not only WIDEN with depth, resulting in each working face having that much more of the high-grade VEIN ORE (and less of the lower grade wall rock), they also tend to INCREASE IN GRADE with depth. Based on this, perhaps that 74 gpt projection might be a bit low IF YOU’RE TRYING TO IDENTIFY THE AVERAGE SHIPPING GRADE OVER TIME.
  2. The Auryn geoscientists have noted that at level 2, the DL1 (skinnier vein) and the DL2(wider and richer vein) were 4 meters apart. At level 3, they were only 3-meters apart. The working theory is that they are about to merge soon at a lower level. This might result in a WIDER vein structure filling up more of the working face with higher-grade VEIN MATERIAL as opposed to wall rock. This may or may not put upward pressure on the AVERGE SHIPPING GRADE.
  3. As Auryn opens up the lower sub levels, they can opt to selectively mine the WIDEST and RICHEST veins they encounter first and hold off on the others. This “optionality” might put upward pressure on the AVERAGE SHIPPING GRADE.
  4. Auryn is planning on putting in their own on-site assay lab. This will allow them to be much more nimble in making decisions as to where to concentrate their efforts. The artisanal miners had to do things the old way. Prior to cutting a deal with the new lab, “AAA”, Auryn had to wait an inordinate amount of time in getting results back meaning decisions could not be made “on the fly”. Kevin made the point that the “VELOCITY” of developments should increase from here on out suggesting that the “bootstrapping” days might be behind us. During the “bootstrapping” days, management has the tendency to throw nickels around like man-hole covers but progress tends to be slow. The Covid pandemic didn’t help progress much.
  5. The on-site beneficiating technologies are vastly superior now to what they were when the artisanal miners were producing their 64 gpt gold ore. These miners had a terrible time recovering the “fines” (very small particle gold) with the existent technology. About 50% of the ore they mined had a significant amount of these “fines”. Their efficiency was so bad that the “tailings/discards” they left were still running at 14 gpt gold which is over 3-times the average “head-grade” of gold being mined today in underground vein operations. The artisanal miners tinkered with a couple of different beneficiation methodologies which got their average up to 92 gpt with a ”flotation” system and 102.7 gpt with an unidentified beneficiation system. This amenability of the DL2 ore to being beneficiated should put upward pressure on the average SHIPPING GRADE achieved by Auryn over time.
  6. In the “old workings” there was very little VISIBLE GOLD. At level 3, there was VISIBLE GOLD all over the place.
  7. From here on out, we need to be talking in terms of “gold equivalent” SHIPPING GRADES where the contribution from the copper is factored in and added to the gold SHIPPING GRADE. The “old workings” had negligible copper. At level 3, a very high-grade form of copper known as BORNITE was pretty much ubiquitous. The level 3 assays done at the intersection of the Antonino Adit and the DL2 Vein came in at a robust 4.5% copper. The average grade of copper being mined worldwide is currently 0.6%.

When I “pencil in” an average SHIPPING GRADE of 64 gpt gold for Auryn, I think I am being ULTRA-CONSERVATIVE but, again, we should know the accurate numbers soon. Maurizio seems to be a big proponent of the “underpromise and overdeliver” school of management.


Yet again, we need to look back at the HISTORY prior to making any projections. Unlike with the HISTORICAL SHIPPING GRADES, this time it is very RECENT HISTORY we need to study. The Auryn miners have been “MINING” in this area for quite some time. They just haven’t been “DIRECTLY MINING” the DL2 Vein ore because they just arrived on the scene recently. They’ve been doing “EXPLORATION/DEVELOPMENT MINING” with the intent to locate the high-grade DL2 Vein ore, gain access to it and provide a means to transport it out of the belly of the mountain and up to surface. They recently succeeded on all of these fronts including CORROBORATING the extremely high HISTORICAL SHIPPING GRADES with their channel sampling program done at the intersection of the Antonino Adit and the DL2 Vein. Here two groups of samplings revealed VEIN GRADES over a 0.6-meter width averaging in between 150 and 164 gpt gold. The associated SHIPPING GRADES will be less because of the less well-mineralized wall rock component of that which is shipped.

Pretty much the same “MINING” process that allowed the Auryn miners to drift the Larrissa and Antonino Adits (blast, scoop then transport to surface), for a combined amount of perhaps 700-meters in total, will be used to MINE the DL2 Vein ore. WE ALREADY KNOW HOW MUCH THEY “MINED” ON A DAILY BASIS WHEN THEY WERE BACK IN “BOOTSTRAPPING” MODE DURING THE COVID PANDEMIC. CAN YOU SENSE BOTH HOW RARE IT IS AND HOW FORTUNATE IT IS FOR ANYBODY DOING DUE DILIGENCE ON A MINING PROJECT TO HAVE A PRETTY GOOD READ ON PROBABLE SHIPPING GRADES AS WELL AS PROBABLE PRODUCTION RATES? I’ve never seen this before in 43 years of investing in this sector.

Auryn management kept us up to speed on the length of the Larrissa and Antonino Adits in their QUARTERLY UPDATES. For instance, in one recent quarter the miners advanced 95-meters in 1 quarter. Based on 5-day work weeks, they averaged about 1.44-meters in advancing the adit working face, per 9-hour workday. Management announced that they will be working 24-hour workdays after commencing production. For the sake of conservatism, let’s say that they can double the meters mined per day by going from 9-hour to 24-hour workdays. This would result in 2.88-meters per day being mined PER WORKING FACE BEING MINED as long as you have the manpower to mine 2 working faces simultaneously. Increasing the manpower would necessitate upgrading the camp facilities.

I’m going to guess that the adit working face will average approximately 3.5-meters by 3.5-meters over time. This means that the square meterage of the working face is 12.25 square meters. Multiplying this by 2.88-meters mined per day, means that they would mine about 35.28 “cubic meters” per day. Since the density of our granodiorite ore is 2.7 tonnes per cubic meter, this represents 95 tonnes being mined per day PER WORKING FACE BEING MINED, IF THESE INPUT VARIABLES PROVE TO BE ACCURATE. Write all input variables “in pencil” for now so that they can be quickly amended, upwards or downwards, when the accurate data becomes available. HISTORY TELLS US THESE FIGURES AND WHEN HISTORY TALKS ABOUT THINGS LIKE HISTORICAL SHIPPING GRADES AND DAILY MINING RATES, IT’S USUALLY WISE TO LISTEN. The HISTORY is very specific to this region, this type of ore, this elevation, these infrastructural components, etc. The main parameter that will differ is the role that Covid played in slowing everything down.

The historical information available on this particular project, when it comes to critical things like HISTORICAL SHIPPING GRADES and MINING PRODUCTION RATES is extremely atypical. What is different about this deal is the TIME ELEMENT in between the cessation of production by the artisanal miners and the recommencement of production by Auryn. The information regarding MINING RATES associated with Auryn drifting adits is extremely fresh. The HISTORICAL SHIPPING GRADES of the artisanal miners DOESN’T NEED TO BE FRESH. That ore didn’t go anywhere in the interim time period. What happened in the interim is that the price of gold went up 57-fold.

The beauty of commencing production at the exact same spot which had been in production for 30 years and the beauty of just having drifted about 700-meters of adits in this same infrastructural “neighborhood”, is the information provided to those wishing to make admittedly rough PROJECTIONS as to probable SHIPPING GRADES and DAILY PRODUCTION RATES. The very act of making the projections represents an EYE OPENER. We get to see how the various INPUT VARIABLES interact in real time in a mining project. WE KNOW MORE THAN WE MAY THINK WE KNOW ON THIS PARTICULAR DEAL.

What I tell the people in my group is to pretend that the artisanal miners had their last day of work YESTERDAY. Pretend that Auryn bought this project in a “TURN KEY” fashion and all they had to do was locate the DL2 Vein coming in from a different angle, corroborate the HISTORICAL SHIPPING GRADES, and construct the “PRODUCTION ADIT”. WHAT WOULD AURYN HAVE HAD TO PAY FOR THIS PROJECT WITH THE PRICE OF GOLD HOVERING NEAR $2,000 AND THE “OLD WORKINGS” PRESENT TO PROVIDE VENTILATION AND EMERGENCY EGRESS MANWAYS SO THAT THE PURCHASER COULD HARVEST THIS EXTREMELY HIGH-GRADE ORE FROM MULTIPLE LEVELS SIMULTANEOUSLY?

Since there are 2 working faces per “level” being mined, this means that 190 tonnes of ore (95 tonnes per working face multiplied by 2 working faces per level) would be mined PER DAY PER LEVEL BEING SIMULTANEOUSLY MINED. As management has noted, they plan on expanding camp and adding crews. If you multiply 190 tonnes per day per level times 250 workdays per year, you come up with 47,500 tonnes of ore being mined per year PER LEVEL BEING MINED.

Keep in mind that when drifting the Larrissa and Antonino Adits, there was only one working face available to mine at any given time. After the Antonino Adit bisected the DL2 Vein, there will now be 2 working faces to mine per level. One will be oriented towards the NNW and the other towards the SSE. When you add in workdays that are 2.6 times as long (9 hours versus 24 hours), you can see a marked increase in the amount being mined per level. This is still assuming that Auryn will use those somewhat archaic handheld “jack-leg” drills. If they were to deploy a fully-mechanized “jumbo” drill rig, these numbers would need to be adjusted upwards SIGNIFICANTLY. Management is studying the feasibility of when to add a “jumbo”. THE TIMING OF THE DEPLOYMENT OF A “JUMBO” DRILL RIG, IF THIS DOES COME TO PASS, IS THE “ELEPHANT IN THE ROOM” FROM AN ECONOMICS POINT OF VIEW.

If you take that 47,500 tonnes of ore being produced per year per level by the artisanal average HISTORICAL SHIPPING GRADE of 64 gpt gold, you’ll get 3.04 million grams of gold being produced per year. Again, this is assuming the continued use of archaic “jack-leg” drills. With there being 31.1 grams per Troy ounce of gold, this would represent 97,749 ounces of gold being produced per year PER LEVEL IN PRODUCTION. If the average SHIPPING GRADE comes in at 65.4 gpt gold, this would result in right at 100,000 ounces of gold production per year per level. If Auryn could clear $1,000 in profit per ounce produced then this would result in about $100 million in profits per year PER LEVEL. The clearing of $1,000 in profit per ounce produced is a separate discussion and involves things like the terms of offtake agreements and ALL IN SUSTAINING COSTS (AISCs) to produce an ounce of gold in concentrate form.


Remember all of that talk about Auryn slowly “bootstrapping” their way along in order to minimize dilution of either the percentage of the project owned (100%) or the share structure? Nobody bought any “jumbo” drill rigs for $500,000 at a time when there was only one working face in action while drifting the adits. I’d guess you need 3 or 4 working faces being simultaneously mined in order to keep a “jumbo” busy. Maurizio was even willing to advance all of the cash needed to put the project all of the way into production while charging zero interest. This allowed the Auryn share structure to stay at an extremely thin 70 million shares outstanding.

That 70 million shares outstanding figure didn’t resonate a lot back during the “bootstrapping” days. With profits on the horizon, however, a theoretical $100 million in annual profits, all of a sudden represents $1.42 in EARNINGS PER SHARE. In the mining sector, the average “multiple” of EPS that corporations trade at is 30.21. This stat comes from a recent study by the Stern College of Business at NYU. That would theoretically represent a $43 share price for a corporation currently trading at 60-cents. Now you can see why I’ve been so hesitant in making these extremely rough projections. That’s just for 1 LEVEL being in production at the DL2 Vein project. This does not include the other sub levels, the other 5 main veins, the Pegaso Nero, the LDM, the various breccias, skarns and mantos, etc.

WARNING: I AM NOT SUGGESTING THAT AURYN IS GOING TO RUN TO $43 PER SHARE IN THE NEAR TERM. WHAT I AM CITING IS THE IMPORTANCE OF “RUNNING THE NUMBERS” WHEN HISTORY SERVES YOU UP ON A PLATTER ALL OF THE INFORMATION IT HAS IN THIS PARTICULAR CASE. In MINERAL ECONOMICS, the prognosis for the success of a mining project always seems to boil down to POTENTIAL SHIPPING GRADE AND POTENTIAL PRODUCTION TONNAGE. In regards to this Auryn/Medinah situation, it’s these 2 parameters that HISTORY has provided us with a great deal of insight into.

Obviously, there is a tremendous amount of work yet to be done. We don’t know how long it might take for Auryn to ramp up production to a level of 190 tonnes per day per level in production. Is it going to take a couple of quarters, a year or two, who knows? My gut feeling is that the PROFITABILITY early on, is going to be so strong, that a “jumbo” drill rig is going to be deployed much sooner than later. One of many things that I do not have a good read on is how long it might take to sink the “decline spiral” down to incorporate the next four or so levels below level 3 which is ready to go once the “ventilation/safety egress chimney” is completed. In regards to the projecting of DAILY PRODUCTION TONNAGES, I sense that many don’t realize just how difficult things were back when the Covid pandemic was in full force.


Thanks for this informative post. Im assuming the obvious objective is to first maximize production at the DL. What do you think the next logical step would be? Perhaps putting the Caren into production or start funding a drill program at the PN?


Funny, the little Excel spreadsheet I’ve developed over the years of reading Brecciaboy’s stuff comes to just about the same conclusions - given the parameters he cites.

I wonder what the terms of typical offtake agreements are - what kind of cut is the average we have to give to them? Seems like maybe only a few percentage points?

That being said, the following link indicates that the benefits from execution of an offtake agreement can greatly affect the share price (benefits = automatic market, loan facility to ramp-up production, etc.). At the current depressed share price, would a rational person buy more MDMN? I actually find myself considering this. Hmmm …

And oh, by the way, we sure are FORTUNATE to have the likes of Brecciaboy around here - very grateful for him, and others too! If we all go away with just a fraction of the speculated profits, we’ll at least be able to say we have substantive and computational metrics at hand - which he has been patient enough to re-hash over and over again for us laymen.


I agree. Especially like the $43 a share. I will be a 2- millionaire!!!


Can anyone provide a single example of this over the seven year period since he took the asset?

Either way, it sure would be refreshing if some contributors on this board heeded this “school of management”. Going from zero ounces/cashflow to 100koz and $100M is akin to going from riding a tricycle to flying an airplane and that assumes that there is a fully designed feasbility study with a block model. Without a model it is literally impossible to mine that volume of ore when trying to chase a vein. This isn’t an opinion. Underground mining is highly challenging even for well capitlized companies who have spent the money and time mapping out the deposit. As a best case scenario there will be times of higher grade (20gpt) decent volume sections when they are on the vein followed by lag periods where they have lost the vein or are dealing with pinchings and swells.

The problem with landing an attractive offtake agreement (3-5% discount to spot gold, 2% discount to copper, etc) is that the offtakers rely on life of mine both a) to ensure its worth their effort to take the con, refine it and sell it and b) to ensure that there is enough production to pay back any forward sale/financing (which AUMC clearly needs). Once again, without a mining model/feasibility, you won’t get a legimate offtake agreement b/c its simply too large a leap of faith. Offtakers can’t rely on historical results. The other problem will be the concentrate. Offtakers love Dore b/c its a higher margin business for them (vs. trading refined metals) however a crude conentrate (what you get from gravimetric recoveries) is considerably harder to move. It’s heavier (increasing transportation costs) and harder to guage the mineral content/recoveries.

It makes no sense to me why they don’t at least start to send ore to Enami (really this time) pay down the debt and be in a position to organically advance the concetration capabilities via cashflow.

No, I don’t pretend to know as much about the project as Maurizio but I do know the offtake market very well and there simply will NOT be a normal offer on the table at this stage in the companies’ lifecycle. Reads to me more like another another bone thrown to shareholders eager for fresh information.

It’s important to understand that the good Doc’s HISTORICAL analysis and future predictions are based on 2000 tonnes of material mined over a a thirty year time period to arrive at conclusions which involve 50,000 tonnes a year going forward. Just something to keep in mind.


I agree that the most sensible and likely path forward is shipping ore directly to ENAMI. I have stated my belief more than once that this will be done utilizing some form of gravimetric concentration method because it is the most economical way to get ore to processing. Management will also add a drilling jumbo and 2nd concentrator as the most efficient way to expedited cash flow. These are essential pieces of equipment. Also, as cornhusker suggested, a micro-mucker would certainly speed things up. I had posted a relatively inexpensive underground excavator (#402) for $22K, well within reach of a budget once production starts in earnest. This piece of equipment is also likely to be added.

You go on to state, “Without a model it is literally impossible to mine that volume of ore when trying to chase a vein. This isn’t an opinion.

Yes Baldy, the above quote IS JUST AN OPINION! I’m sure you have reasons for your constant negativity here. I strongly disagree with this quote of yours, but it is expected from a pessamist. I’m glad MC chooses to be an optimist as he diligently persists in transforming this company to a profitable operation. Most thoughts posted here by current shareholders are factual, as well as inspirational opinions. You can read all about the historical refutation of your assertion here: (Gold rush | History, Importance, & Facts | Britannica). It is true most modern deposits use expensive machinery that has replaced the efforts of individual miner-adventurers, it is not the only way. You can see examples throughout the history of discoveries world wide that started without the extensive capitalization prevalent today. There are always exceptions to the prevailing methods of modern practices. I view the following notification excerpts as being more than just aspirational.

  • Develop and complete a comprehensive metallurgical study to evaluate the viability of using gravimetric plants for the concentration and recovery of gold in AURYN’s ore, with the aim of finding a higher margin alternative for processing and sale. Based on the results of the study, we can make informed decisions regarding the most efficient and profitable method of gold recovery and concentrate production.

  • AURYN’s plan is to use future cash flow from production to pay off exploration debts and expand operations. Management’s desire is to eventually become debt-free and produce fully audited financials prior to seeking to move to a higher tier on the OTC Markets.

I note that in April’s notification the use of gravimetric plants is purposeful and plural. This leads me to surmise that either the ore volume anticipated will be so large as to require 2 or more concentrators, or that a second one will be needed to process ore at a distant location. Could plans be in the making for exploiting the Larissa adit? Will there be a return to the Las Dos Marias Project (LDM)? I recall that Larissa’s rich vein deposit was shown to extend 30 meters above and below the tunnel access. It is not just possible, but probable, that mining operations will be expanded by returning to the 42m section of high grade main vein in the Larissa Adit. Management’s long range plans to expand operations remains intact and continue to move forward.


Call it an informed opinion if that makes you feel better. I don’t consider myself a pessimist but rather a realist. My reality is based on knowing that this type of project processing 50,000t of ore at 60gpt is a pipe dream. Using the Gold Rush to underline your point is about as relevant as sifting through Auryn’s press releases over the past seven years. Wow, gravimetric plant(s) as in plural must mean that Maurizio is thinking big!! I love optimists but not those who haven’t been able to deliver on any of those high hopes over seven years. I candidly find it bizarre that anyone still parses through the details of the PR like they are an indicator of things to come. Don’t get me wrong there is a chance that this evolves into a small scale operation and the two new board members may even be trying to get another Hoschild type of deal and maybe it will even develope into something. I think Maurizio is well placed to get paid back and make a bit of coin if things go really well. However, talk about ESG and 100k ounces have no place here.

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60gpt is conservative. Think in terms of shipping grade.

Based on a comparitive analysis of 2000 tonnes mined over a thirty year period?. With 44.1 g/t of gold in reserves, Fire Creek mine, owned by Klondex Mines and located in Nevada, United States, is believed to be the highest grade underground gold mine in the world. And you think averaging 60gpt “shipping grade” is conservative. This is EXACTLY why I make the argument that the Doc is poisening the well by the absurdity of his projections. I don’t think he has an agenda but its just not fair to plant this seeds with people who don’t understand the realities of mining.

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…. And neither do you Baldy, except as a pessimist that lost his shirt here and wants to take revenge anyway you can. I think you just delight in saying the same negative responses and are slowly less negative as things slowly turn around. You,ve already said once this is in production you may decide to own a few shares at a higher price. Will you then give MC a little credit for not abandoning all shareholders early on, and just collecting $30 million on the whole project as you suggested earlier this year? You do not appear as a shareholder that would like to make good on a way to make good on a hedge option that is taking too long to materialize. Your idea of “entertainment” as the reason you’re hanging in and out here has a very disingenuous ring to it. You’ll be right whether MC is successful or not. You will always say “See, I was right!” :wink:


I’m a pessimist b/c I don’t believe that a company that took seven years to come up with a hope for a plan for cash flows won’t be the highest grade underground mine in the world by a magnitude of 50%? Sounds about right.

To clarify, I said I’d be willing to buy shares at a higher price if they actually get off the mat. At today’s valuation vs. where they are in the “life cycle” I wouldn’t touch the stock. However, if they actually get some momentum and deliver on something, anything, I’d consider buying some shares at this or higher levels. The nice thing is that I don’t have any opportunity cost exposure and should be able to establish a position at these levels if they actually get something done. Based on precedent this, IMO, is unlikely but I think Maurizio will probably get paid back before they lose the vein or encounter the 1000’s of other unknown variables that effect undercaptilized mining operations.

I did take a bath on my positions in MDMN and AUMC but take a bit of consoltation that both were over 300% higher when I finally took my medicine many years ago. That’s the market. No emotions here but I do empathize with anyone who’s held.

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It’s all good folks the light at the end of the tunnel is not far away. Don’t let the negative energy ruin your mood, enjoy life the most precious asset we have here on earth. I certainly will be enjoying this precious asset for 3.5 months in beautiful Greece. Geo if your are in Greece give me a shout we can meet up and have a few beers in heaven’s country!



Baldy quotes brecciaboy as saying, “Maurizio seems to be a big proponent of the ‘underpromise and overdeliver’ school of management.” Baldy then asks, “Can anyone provide a single example of this over the seven year period since he took the asset?”

Let me take my whack at that…

I am not looking at my notes from the Oct 1, 2016 shareholders meeting (wherever they might be), but my 71-year old memory is recalling that we were advised right off the bat that morning to not expect anything out of this investment. Maurizio and company were going to do everything they could for us shareholders, but we could still lose every penny. So far, we have not.

Every one of us has our own frame of reference for what we see here, and I don’t expect anyone else to count the above as an over-delivery. Please excuse me, however, if I do – because I do.

Again, I’m not referring to my notes, but I believe Maurizio shortly went on to say that the newly-hired legal team expected to spend a minimum of 18-24 months sorting out the “forensics” of the larceny, hoping for a judgement in our favor. I believe that in fewer than 12 months a favorable judgement was in fact delivered and the crooks sent packing. For me: another over-delivery.

For my first five years here, I was fed total lies every week – whoppers!.

Every day of the past seven years have felt like an over-delivery to me.

– madmen


MM, I won’t say that it was an overdeliver, but certainly much better than the certain death of the stock which would have happened due to the complete fraud that had been delivered to us by Les and JJ. What was delivered was a reorganization plan that kept shareholders in the game with a stock still listed in the market and a plan to move it forward. The lawsuits were a devious plan designed to deliver a fatal blow to CDCH and MDMN, which was thwarted by the efforts of Kevin and MC. While completion of this company’s revitalization is taking much longer than I personally would have liked, we are further along than at any other time in the company’s history. I’m sure management did not foresee the difficulties brought on by weather, equipment failures, Covid and regulatory restrictions. Despite these hardships, progress is still moving forward despite the constant derision of one particular former investor that wanted a return on his lost investment that he may never see again. The constant presence of an individual that could not accept that a poor decision was made and that he chooses to blame on anyone but himself is not something to be commended. Although right on many investment points he makes, it does not benefit the vast majority of shareholders that remain in this investment for reasons that differ greatly from his. It does not explain Baldy’s attitude towards this company and its shareholders. This is especially true of myself and the investors that hired Dr. Richard Sillitoe.

For Baldy’s information, Dr. Sillitoe makes a living from evaluating ore deposits and is still active:
“Richard Sillitoe is a world-renowned economic geologist. He has been an economic geological consultant for over 40 years and has worked in over 70 countries. He is best known as a porphyry-epithermal specialist but is well versed in al styles of gold and base metal mineralisation. In 2002 he was the first non-American President of the Society of Economic Geologists. He is the author of over 100 economic geological articles and also two books.”

I’m glad management had the wherewithal and foresight to gain Dr. Sillitoe’s valuable technical advice on how to proceed with the exploration and exploitation of the various economically valuable ore deposits on the ADL’s properties. The past work done on the ADL was worth taking a look at then, and for those who may need to be reminded that this is not a lost cause as some may try to convince you.

Sometime ago CHG took the time to show how these were all correlated:

The Pegaso Nero also remains as a potentially valuable asset that has evidence of artisanal adits present. I hope we all have success in making wise decisions in choosing profitable investments, including Baldy. His expertise may be better spent elsewhere instead of convincing us of his superior investment skills here. We all know we were snookered as revealed back in 2016 & 2017. The failure was not due to a lack of effort on Auryn’s part or due to insufficient ore grades to be mined. I hope anyone professing to know what the future has in store for this company will be pleasantly surprised someday. Until the final chapter is written my stock is still tucked away in the sock drawer of my IRA and ROTH. I rest assured the effort being put forth by MC and management is not just so that they can break even and walk away. The goal is to grow incrementally into a healthy cashflow rich company making a profit year after for all of us “stuckholders” , including management. :smile:

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
Winston Churchill


Think shipping grade