Auryn/Medinah - 2023 1st Half General Discussion

Fair enough. Pinch me, but I think Maurizio probably wants to make a “profit” off the money he has invested in this thing. As I recall, he bought MDMN shares between .06-08? He also advanced a no-interest loan of some $3.6 Million, which I presume he would recover from “production” before any third party can get around to making an offer? I think the company would do well to try its hand at a do-it-yourself production operation to see how far they can get. This is of course assuming the assays come back good and a profitable operation can be commenced. Then there’s the possibility that the assays can come back stellar, which could attract headlines (and FOMO) - or that they come back all fool’s gold (and bankruptcy). We’ll see.

1 Like

AUMC Market cap is already at $38M. Maurizio wont be selling for $30M. The further he goes with the project, the higher the price tag goes. He’s not an idiot. This is where BrecciaBoy talks about leverage over a major. If they sit back and watch MC profit $5-10M a year doing it himself, they lose a ton of leverage at the negotiation table.

I agree that a hit and run may be palatable for MC but i doubt he will take less than a 5 year NPV of projected profits.

6 Likes

I think that is the plan.

5 Likes

I only throw out $30M as a random number. Call it $100M. No idea but the current market cap for AUMC isn’t “real” because there’s no liquidity ($38M today would be very rich for a project at this stage). It’s not like Maurizio or any holder of size could actually get out of the investment at this point so there needs to be an exit. I have no doubt that Maurizio’s objective is to advance this to a real project. Its hard work and he ain’t getting any younger. The point I was trying to make is that $500M is a long journey with a lot of “exits” along the way. My guess is that most long-term holders have brought their averages down over time either way.

2 Likes

Yeah, I’m down to .6 cents per share average. With a LOT of tail chasing.

That is a fair statement, however the expectation here is that more transparent information and results will drastically increase market cap and liquidity, not the other way around. Your opinion is that $30M is too rich at this stage. Also that’s fair enough for the very short time being, as we are on the doorstep entering the next stage. Assays of the DL is a MAJOR step forward into that next phase, as it offers transparency and the ability to make revenue projections. I strogly disagree with your opinion that this step doesn’t serve as a major catalyst.

You are correct though that we are tied to MC’s exit strategy being he is the major shareholder in AUMC. I’m confident enough that MC will know how to assign a reasonable price tag. That becomes easier to do with every truckload of ore processed and ring of the cash register. Its much harder for a major to convince a junior to take an out-leveraged offer when the junior is ringing the cash register on their own (albeit at slower clip than with a major’s help).

Also we haven’t even begun to assign value to the rest of this enormous property. Could MC call it a day for one payday of $100M? Sure, but does that include the undrilled potential copper porphyry? I doubt he gives away everything with one stroke of the pen. A world class copper deposit would be worth 100’s of millions especially with supply/demand of copper on the horizon.

6 Likes

Zero possibility of giving it away for $100M if the DL is high grade at this level.

10 Likes

Thanks Wiz. Fingers crossed that it is high grade. From there it will be fun establishing a floor on the value!

4 Likes

Brecciaboy,

While we are all of course experts here, as far as I know you are still the only one of us who has testified in front of the US Congress (or was it the Federal Trade Commission, or…?) in regards to market practices / malpractices / anomalies / outright crimes plus other shenanigans.

Sometimes the closer one comes to reaching a goal or a destination, the more clearly it can be seen.

I would value hearing your latest assessment of the overall implications of 67 million shares of AUMC’s 70 million shares currently being restricted, leaving a mere 3 million shares available for trading.

– What if someone put in a $1.5 million order for all 3 million shares?

– Might that trigger a “share squeeze” and send the price of AUMC soaring and pulling MDMN right along with it? (I ran this notion past one of our other resident experts, and he assured me that market makers would immediately beat it down somehow.)

– Is it possible the update we expected in early January has been delayed because the assays look so overwhelmingly fantastic (perhaps they consistently show 1,000+ grams AU per ton?) that Maurizio and company (perhaps uncertain about all the explosive variations of a Game Stop-type situation?) are being super-cautious, dotting every last i and crossing every last t before proceeding? Maybe we really don’t want to be front page global news…?

– Is it possible that the new assays are incredible enough to have heated up AURYN’s several suitors? Maybe there is something truly explosive being cooked up behind the scenes, unfinished, but close?

– Maurizio has certainly earned my trust, and I would think the trust of everyone here. He has meticulously done everything I’ve ever heard him say he’s going to do. He has never over-hyped anything. My “fool-in-the-market” mind is thinking there must be a very good reason for the delay. But you, brecciaboy, you aint no fool.

What’s up, doc?

Please and thank you.

– madmen

5 Likes

I think any dreams of short squeezes or Game Stop-type situations, or secret plans by the company withholding assays are way beyond wishful thinking, to put it mildly. It’s fine to be hopeful that the company finally figures out a way to monetize their holdings for the benefit of shareholders, but it’s probably best and responsible for shareholders to maintain an even keel and wait things out. Historically, any and every delay with Auryn/Medinah have been due to issues with the business, both normal course of business as well as deceptive/deceitful (JJ, LP). While the nefarious part of this investment is (hopefully) way behind us, the delays from “normal course of business” remains a constant for this and every other mining company.

9 Likes

At least after this update that’s late we will only have to wait 2 months for the 2nd quarter update instead of the usual 3 months. I am just looking for some more positives from this delay

2 Likes

And meanwhile you have this stock that has no value, does nothing(no production) whatsoever and has a market cap of 11 Billion. The stock rose from .004 - .3375 from Dec. 2020- Apr. 2021. Now that’s daunting!!

5 Likes

How many high grade assays does a project need to prove its viability/value? Or to claim to even have an inferred resource? 50, 100, 250? How about a proven resource? Over what area/implied tonnage?

You will find most juniors trading at $4-$15 per ounce of inferred resource in the ground. Admittedly a tough market and AUMC isn’t actually drilling to define a resource but, in the same “vein” (no pun intended) this is why the assays (good or bad) aren’t the catalyst this stock needs. IMHO

How about some fun with numbers since you seem to use a different kind of math than some of us here. :stuck_out_tongue_winking_eye: This is just for fun thinking out loud since Dogecoin is mentioned with a dream valuation of something from nothing. I’m sure Hulkster was smiling when he mentioned DOGE has a market Cap of $11B, kinda something from nothing there isn’t it? Can we do better than the $30M or $100M figures you’re throwing at shareholders. I like a cold shower once in a while, …refreshing, thanks. :joy:

We have 3,000,000 in the float. Let say we do as good as DOGE and MDMN goes to 0.086549.

What would that do for our conversion factor goal? (200 X .086549)=$17.3098 per converted share! Whoa!!! That’s impossible because $17.3098 X 16,100,000 = $27,868,7780.

If all 70,000,000 AUMC shares then rise overnight to MDMN’s conversion at $17.3098 valuation, then ($17.3098 X 70,000,000)=$ 1,211,686,000 Bazingah!!!

OK, so our valuation probably isn’t going to reach $1.2B overnight, or this year. I like your 4 cent figure for a maximum valuation for MDMN share value once production begins in earnest, allowing debt to get paid off. Is this a possibility this year if we have HiGrade gold Assays reported that many expect?

**If we do, and active trading with day traders jump aboard, I like a nickel to 7 cents even better.

Anyway, then convert when MDMN reaches a nickel – (.05 X 200) = $10! Then 16,100,000 converted shares are injected into the 3,000,000 AUMC float. This results in 19,100,00 AUMC shares instantly for sale at $10 ($19,100,000), but 70,000,000 X $10 will then raise the market Cap of AUMC to $700M, we’ll go to a higher exchange and options will start to be in play. Ok, I’m only having fun with numbers here, I haven’t taken this stock out of my sock drawer drawer yet, but I can still day dream about the day when I do. :slightly_smiling_face: And oh, if MDMN goes between the 0.06-0.08, then things are notched a level higher. I’m just sitting back and watching things unfold at their own logical pace.**
Remember, I’m just having some fun with numbers here and day dreaming. :wink:
GLTA
EZ

4 Likes

and from .004 to .33750 to .086438 ! Not sure what your point was ?

BE mentioned that Auryn would need a market cap of 900 mil for MDMN to reach .04 cents.

I think we’re putting too much emphasis on the upcoming grades. We definitely have a mine and the ore grades will definitely be ECONOMIC. I can’t think of a scientific reason why the grades would stray much from the grades witnessed at levels 0,1 and 2 as well as the 12 samples taken at the intersection of shaft A and level 2. We’ll see! There’s a lot of explosivity encased in our STAGE OF DEVELOPMENT in the mineral production cycle for a vein deposit not to mention the share structure.

I’ve got our “All In Sustaining Cost” (AISC) estimated at somewhere around $930 per ounce. With the POG where it is, that means that every ounce produced will represent a profit of about $1,000. With stellar grades, obviously a whole bunch of EXTRA ounces are going to be sitting in every truckload over and above that of a lesser-grade deposit. The 2 main parameters would be the PRODUCTION RATE in terms of “tonnes per day” and the average grade in terms of “grams per tonne”.

The producers that are mining 4 gpt gold, which is the average grade worldwide for vein deposits mined in an underground fashion, are making good money right now unless their infrastructure is awful and their AISCs are off the charts on the high side. If the AVERAGE grade being mined is about 4 gpt gold, then there would be a lot of producers averaging 2 or 3 gpt and a lot at perhaps 5 or 6 gpt gold. They’re all making money. I hope nobody is worried about this deposit being “ECONOMIC”. At a $1,930 price of gold, my grandkids’ sandbox is ECONOMIC. When the artisanal miners at the DL1 Vein, “SMFL”, were averaging 64 gpt over the course of 30 years, the price of gold was $35 per ounce.

The key for a young producer at this STAGE OF DEVELOPMENT is how much GROWTH they can generate compared to other mining companies. If Auryn management is producing from 1 working face early on, they’ll be able to generate “X” amount of annual profits dependent upon their production rate of which GRADE is a component. The stock should be trading at “Y” level dependent upon the number of ounces produced each earning $1,000 in profit.

If Auryn can get in there and put in, let’s say, 3 descending spirals, 20-meters from the “gallery” as is their plan, then all of a sudden with 2 working faces per level (one aiming to the NNW and one towards the SSE) they will be producing from 8 separate working faces on levels 3,4,5 and 6. They should be able to generate profits of “8X” and the share price should be trading at “8Y”. That’s a 700% increase in profits and share price over a currently undefined period of time. I’d guess perhaps a year or two. Hopefully management will provide some guidance.

These seemingly insane PRODUCTION GROWTH PROFILES are a 1-time deal for all new deposits that get put into production. Barrick increasing the number of working faces at one of their deposits from 101 to 108 represents a 7% increase in production with probably no effect on their PPS. That deposit of Barrick had its day in the sun long ago when it too generated insane PRODUCTION GROWTH. Those days are now gone for that deposit.

The grades found at level 3 which we are anxiously waiting for, will determine the launching point and what the initial appropriate share price “Y” is. It doesn’t affect the trajectory of the growth in production from 1 to 8 working faces. Investors want GROWTH, no matter what the initial grade or production level ends up being. They want a tangible reason why the share price should go up. A combination of any initial economic grade and a robust PRODUCTION GROWTH PROFILE can supply that.

I saw some discussion on when Maurizio might choose to sell out. Maurizio owns something like 45 million of the 70 million Auryn shares outstanding. He wants to ride that insane PRODUCTION GROWTH PROFILE all of the way to the beach. Why share that dynamic GROWTH PROFILE with a major miner unless you need either their technical expertise or their money IN ORDER TO GET INTO PRODUCTION? When it comes time to develop the Pegaso Nero, he’ll sit at the negotiating table with the ability to at least partially fund development there by himself.

WHAT FACTORS GO INTO THE INITIAL SHARE PRICE LEVEL OF “Y” PROPORTIONATE TO PRODUCTION FROM 1 WORKING FACE?

The average “multiple” of EPS in the mining industry is 30.21. The established producers will have a “multiple” at the bottom of a range of multiples proportionate to how much they can grow their earnings over time. The new producers that can generate PRODUCTION GROWTH seemingly through the roof will command much higher “multiples” of EPS. Investors will pay up for GROWTH. They want a tangible reason WHY the share price might go up, let’s say in the above example, by 8-fold.

WHY IS THIS AURYN/MEDINAH SCENARIO KIND OF AN ENIGMA?

In a sense there are two types of junior mineral explorers and developers. There are those that have a discovery with EARLY PRODUCTION OPPORTUNITIES (“EPOs”) THAT CAN ACCESS THOSE INSANE PRODUCTION GROWTH PROFILES WITHOUT SHARING THEM WITH A MAJOR AND THEN THERE ARE THOSE WITHOUT THIS ABILITY.

Probably 98% of the juniors with a discovery have neither the technical expertise nor the financial wherewithal to put a deposit into production WITHOUT EITHER DILUTING THEIR SHARE STRUCTURE TO DEATH OR DILUTING THEIR PERCENTAGE OWNERSHIP OF THE PROJECT SIGNIFICANTLY. Maybe 2% of the juniors with a discovery have a Maurizio type “sugar daddy” to advance the funds needed to go into production at zero interest rate so that NEITHER the share structure nor the percentage ownership sustain dilutional damage. I will never buy shares of a junior with a discovery that needs to sell shares in order to drill out a property in order to attract the attention of a major.

Those other juniors need to raise tens of millions of dollars by selling shares in order to drill out the property and generate some MR/MR in order to attract a major miner with the dollars and technical expertise to put it into production. At the negotiating table, the junior will get its hat handed to him. Why? It’s because the major knows that if the junior doesn’t rapidly bite on a low ball offer then it must continue to sell shares and undergo further dilution just to service its monthly burn rate. The junior has no cash flow.

Auryn had high-grade EARLY PRODUCTION OPPORTUNITIES and a CEO with the financial wherewithal to advance the funds needed to get the project into production without charging any interest. At the commencement of high-grade production, Auryn is sitting there with only 70 million shares outstanding and 100% ownership of the project. That’s insane; that almost never happens. The argument is made “but Auryn has no official Mineral Reserves/Mineral Resources”. You’re darn right they don’t. They don’t need to impress a major to provide the technical expertise or the dollars to get the project into a cash flow positive mode.

Eric Sprott recently chided mining investors contemplating an investment in a vein deposit for not being able to multiply the strike distance of the vein by its known depth by its estimated average width. Once you get that VEIN VOLUME figure you simply multiply it by the SPECIFIC GRAVITY of the ore (2.7 tonnes per cubic meter) in the case of the DL1. If you multiply this ESTIMATED TONNAGE figure by the average grade in terms of grams or ounces per tonne, then you have a “back of the napkin” estimate for the gold content of a vein. You can use this as a screening tool.

Depending on your input variables, for the DL1 Vein you’re probably going to come up with north of 1.2 million ounces of gold for just this one of the 5 main veins present. You do not want to trash the share structure of the corporation in order to determine if the exact number of ounces is 1.3862 million ounces broken up into the 5 main categories of MR/MR. Who cares, the mine life is going to be measured in decades either way.

8 Likes

$500M, not $900M. If we settle on 200:1 (worst case) it would be $560M

What assumpotions do you use to get your AISC>> How many tpd, what grade, what mine life what reserves, what initial capital cost etc etc.?? TIA

Gee whiz, I left out a zero & no one bothered to point it out or correct it?
19,100,000 AUMC shares at 10 bucks would add a market Cap of $191M to just the free float upon conversion at a nickel conversion for MDMN. No one would notice a market Cap going up from $30M for AUMC? An overnight market Cap increase for all 70M AUMC shares to $700M would command a great deal of attention! Many of those MDMN shares market makers may be counting on writing off their books may be a problem and long forgotten if they haven’t already been resolved. I think I recall some shareholders reporting their MDMN shares were left untradeable a while back.

No, it will all be based or results, that while being very promising, for too many years have been delayed by circumstances well beyond control. Many of the exploration/early stage mining stocks have done quite poorly over the past several years, despite phenomenal drilling results. Can you tell us that you aren’t “underwater” on your portfolio of mining stocks? Personally, I’m up on some of my other mining stocks, down on others, and overall about breakeven where I was a year ago. Many are trending up. This one will in time also.

Let’s dial back to 2015-2016 just before everything got derailed. We were off to a great start. In Sept the Caren’s Merlin Vein captured our attention with the notification heading of “AURYN Mining Chile SpA Unveils Weighted Average of 26.9 g/t Gold in 200 Samples ~Bonanza Grades of up to 66.5 g/t Gold~

Merlin 1 adit was to have a cutoff grade of 15 g/t. The Caren Property was permitted for exploitation of 5,000 tons/month. The Merlin Vein adits 1-3 looked like we’d be mining with an annual projected 25,000 troy ounces of gold. We haven’t gone back there, yet. Surface mapping of the ADL showed what appeared to be a complex system of veins, not all of which are economical. (see http://aurynmining.com/mapping-and-trenching-program-results-indicate-high-grade-gold-mineralization-in-the-epithermal-vein-system-at-merlin-and-fortuna-targets-in-the-altos-de-lipangue-project/ ).

Well, we got derailed and five years later we find where we are at; Having apparently located the DL1 vein on the Fortuna project with many remaining questions to be answered. Do we know how many tons per month this site will be permitted for initially? I don’t think it’s been announced. Surely it will be no less than the 5000 tons/month than was granted for the Caren. Annual projected production at 25,000 troy ounces would provide a good starting cash flow, and I would surmise from all indications, quickly be exceeding that figure early on. Optimistically that would build quite rapidly, if as DOC states there will be 2 working faces per level, and we have a cutoff grade averaging greater than the 15 g/t which was stated over at the Merlin Vein. This is a very large property, and the DL1 is just the start to a very long lived mining project once we get into production and positive cashflow. I’m awaiting management to release information to let me know when I can take my shares out of the sock drawer.

5 Likes