Auryn/Medinah - 2023 1st Half General Discussion

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These aren’t assays. For what its worth, meaning .6 meters can’t be intepreted into economic nor mine viability. They don’t even breakout the width of the intersections across the (high grades). They even state that the width of the vein at the point of interception is only 50 cms.

I’m not trying to focus on negatives as the news is generally positive. Just pointing out the actual mining interpretation of the results. A lot more is needed but obviously a step in the right direction. Six months of preparation for exploitation as a starter.

As a side note, I loved reading BB’s hedge on the grades right before the news came out. Must be nice to get an early look at the PR :;

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What does Au – FF + FG (g/t) mean in the Assay column ?

Au is gold …

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Just a guess, but that’s a hyphen; FG is likely Fine Gold , no idea what the FF is, but maybe a form of free hi-grade pure gold
Maybe DOC could enlighten us non geo-geeks :wink:

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I don’t think we will be waiting until April to get the next update. See last sentence

On January 18, 2023, the team received the fully repaired scoop and continued extending the tunnel to fully uncover the DL2. The DL2 vein at level 3 in the Antonino Tunnel is 3 meters from the DL1 vein and 60 centimeters wide. This adds credence to the team’s hypothesis that the veins will converge at depth. The team has taken new samples of the entirely uncovered DL2 and will report these when received.

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126

There are different gold assay techniques depending on the coarseness of the gold sample. I think the FF and the FG are abbreviations for the Spanish name for these tests. I think the “F” stands for “fiero” which is fire in Spanish.

Auryn ran into this same issue back in 2016 when they got those “bonanza” grades from Adit #2 at the Caren Mine. The standard “Fire assay” only registers gold grades up to 50 gpt gold. If the gold grade is higher than that then you go to a “gravimetric fire assay” (which I think is “FG”-“fiero gravimetrica”?) which scales up much higher. I’m going to assume that the need for this second assay might have been related to the delays in getting results but I don’t know that for a fact. The samples ended up coming in at I think it was 68 gpt gold and 124 gpt gol at this adit #2 at the Caren Mine (Merlin 1 Vein). This adit #2 is situated at the 1,840-meter elevation level of the mountain.

Lo and behold, these “bonanza grades” detected in level 3 at the DL2 Vein, across the plateau, were also found at the 1,840-meter elevation level of our mountain. When I get a second, I’ll try to present the interesting findings that have come up when you zoom out and take in the project at a “mining district” level. There’s a lot going on here over and above some crazily high assay grades in some veins.

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127

Caren Mining Preparation Commences

Jun 16, 2016

::: originally posted by AURYN Mining SpA :::

June 16, 2016 @ 15:33pmMetallurgical tests conducted at laboratories in Perú returned an average gold recovery greater than 90%. Test conditions confirmed the best recovery method entails use of a Falcon gravimetric system processing previously concentrated ore.

Low CAPEX and OPEX Costs

Gravity concentration has a lower overall cost per ounce produced compared to cyanide leaching and froth flotation. Not only is the equipment cheaper to purchase, it’s also less expensive to run on a day-to-day basis.

Froth flotation and cyanide leaching both require costly reagents for optimal gold recovery. The type, ratio, and quantity of reagents needs to be optimized for every ore, and variability in the ore or poor reagent optimization can lead to poor recovery rates.

None of our Falcon Gravity Concentrators require any added chemical reagents, which saves you money.

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128

BB,
Your recollection is outstanding!
Same grades at 1840 meters across the entire ADL?

Update on bonanza gold grades in Caren mine, have returned over 100 g/t Au at Fortuna – Merlin system in the Altos de Lipangue project, Chile.

Jan 27, 2016

January 27, 2016 @ 12:36

HIGHLIGHTS

  • Gravimetric Fire Assay results confirmed bonanza grades up to 124 g/t Au.
  • Geochemistry and vein textures confirmed preserved low sulphidation epithermal system.

AURYN Mining Chile SpA is pleased to announce the completion and update of geochemistry results from bonanza gold grades (>100 g/t) at Merlin I vein in the Caren Mine sector within the Altos de Lipangue Project. These important results in precious and base metals encourage the company to advance in the early production evaluation opportunity. In the News Release of January 06, 2015, two samples (34857 and 34860) returned with the maximum values of the Fire Assay analysis method of 50 g/t Au. ICP mass results from the batch sent to laboratory from sample 34854 to 34861 were pending. The samples 34857 and 34860 were re-analyzed by gravimetric Fire Assay method with intention to obtain an accurate gold value. ICP pending results were received from 3A Laboratory. The updated results are shown in Table 1. Adding to this, as was anticipated in the mentioned News Release, there were recognized quartz-carbonate textures and geochemistry vertical zonation in Caren mine.

tabla1

Table 1. Sampling results of adits in Caren mine.

Table 1 shows that the main bonanza grades are in samples collected in the Adit #2 at meter level 1,840 and in Adit #1 at meter level 1,875. Adit #1 is highly anomalous in Au, with samples up to 68.83 g/t Au. Also a good correlation is observed with Ag where the main anomalous samples belong to deeper levels, including values up to 46 g/t Ag.

Even the anomalies in base metals (Cu, Pb and Zn) are increasing their values in deeper samples suggesting the location in the mixture zone between precious metals and base metal zone.

In addition to the geochemical evidence, the quartz-carbonate textures correspond with typical zonation demonstrated in low sulphidation epithermal systems. To illustrate this analogy a schematic section is shown in Figure 1.

cuadro2

Figure 1. Schematic section at Caren mine, vertical textures zonation and exposed levels in Caren and Fortuna de Lampa mines. Modified after Buchanan (1981).

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129

Just to expand on this and to support my thesis that

This mine operation will not look anything like the most optimistic descriptions posted here, at least not for a long time. Nevertheless, is a potential solid money maker. But increasing production will be difficult and completely depends on having lots of faces in operation.

The basis of this assertion is fairly simple, mechanical, and as follows:

  1. Consider the dimensions of the ‘scoop’ being used (basically a bobcat):
  1. Next consider the dimensions of the Antonino tunnel through which this scoop must transport rock too and fro.

  • It is approximately 400m from the entrance to where they have intersected the DL and where they will be constructing the 50 sq. m “gallery” for maneuvering the ‘scoop’ moving up and down the tunnels.

  • The tunnel is about 2.5m wide and about 2.5m high as seen in various pictures

  • The scoop in the tunnel can be seen here: scoop in the Antonino tunnel

  1. Consider the working face: 2.5m x 2.5m. So for every 2m of blast depth you will get 2.5x2.5.2 m^3 12.5 m^3 of rock which is about 3 m^3 of ore (4.5 tonnes or so) and the rest is 9.5 m^3 of empty rock.

  2. So for every such blast the poor scoop with a meagre 0.37 m^3 scoop must scoop up rock, ore or waste, back down the working tunnel, which becomes longer and longer with each blast, get to the gallery and spin, and head down the Antonino tunnel for 400m, dump rock, and go back and do it again. It must do this approximately 35 times to clear the rock from one blast from one face.

Their tunnel can not be smaller than the scoop.: If you make it smaller you just make the bucket smaller. You don’t want to make the tunnel bigger so you can get a bigger scoop, because you just get much more waste rock you need to clear.

Now, if you are dealing with wide 3m or 5m veins, obviously you make the tunnel as wide as the vein and you get as big of a scoop as you can fit and you work that way and much of your transported rock is ore. The issue is the narrow veins.

You can’t fit more than one scoop in a tunnel at a time

So if you consider this, and consider you have to plan the blast, drill, place the explosives, blast, let the air clear, and transport → well there is one shift approximately, 8hrs. So 3 shifts per day, 3 blasts, = maybe 12 to 14 tonnes of ore per face per day. 6 faces = maybe 80 tonnes per day and 2000 to 2500 tonnes per month.

Very high grades and a high POG will enable you to do this and still make a nice profit per face if you are good at what you do. But is very difficult to scale. Making larger tunnels is self-defeating. All you can do is add more faces. And you can only have one scoop going up and down the 400m of Antonino at a time, even if you can have maybe two going in and out of the various active face tunnels.

This is why narrow veins are so difficult. And why Hecla has a 40+ gpt proven resource mine, on the ‘highest grade mines in the world’ list, on care and maintenance because it could not be mined at a profit.

In addition to scaling, another issue is that per blast so much rock is waste that it is hard to avoid dilution, that is mixing waste rock and ore. This study suggests even with optimization you may have 66% dilution with a 0.5m vein width and a very narrow working width, which can drop to below 10% with a 5m vein width.

Again, Auryn will have to be good at what they do. They can still make very good money if the grades hold up even to an average 60 gpt and even if they suffer 66% dilution. But scaling size will be very hard. All of this gets somewhat better if the grades hold up and the veins merge at depth and the width increases. if … if … if. Do note that the distance between DL1 and DL2 decreased from 4m to 3m by going about 35m to 40m down to level 3.

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130

Chg,
Engineers are very hard to find these days. Have you considered offering your expertise to the team down in Santiago?
I’m certain you could at least get a tour of the mines, and report back to us lowly shareholders! :wink: :laughing:
EZ

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Does anyone have the post from the shareholder Volcan from long ago when he posted about the mountain or was that just for the LDM? I like to read that again if some has it to share

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Thanks for confirming that there’s a $10M annual profit model on this target alone.

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Volcan:
“The ADL is probably the last world class deposit ( book definition) in SA. Yet if you don’t loose it before a bunch of worthless stock, you still have a big shot score big.”

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134

CHG, I guess I can assume no conveyer belt would work in this type situation to transport the rock ???

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I am sure there are other approaches. Of course many old mines used rail and carts which were as big or bigger than the scoop bucket. But you could still only have one rail car down one track at a time. Of course as a mine becomes bigger you have more alternatives. I am not saying, of course there are no alternatives. But all of them are further developments, more time, more money etc. So I was just trying to point out a significant restriction in the current implementation.

As a side note, I am aware of a small non-producing junior that has a very unusual historical extremely high grade smallish tonnage silver property consisting of very narrow but amazingly high grade silver. Their narrow vein plan to reduce waste rock is to use 36 inch development width tunnels (as opposed to 2.5m), just barely enough for a man to get down, and have a main tunnel with an electric winch at the opening of the development tunnel with a cable that can go down to the working face with some type of “scraping” device or almost a blade which will be used after a blast to pull all the blast rock from the face back to the main tunnel where it will be removed apparently by rail cart. I am not suggesting this solution. But apparently it has been done before. But I am just pointing it out as another example of how narrow high grade veins are their own little niche world of mining and how people try to figure out ways to work them successfully with small faces / small equipment.

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As I said, I agree if the grades hold up the profit margins model still looks very impressive for a modest tonnage operation. I have tried to consider pessimistic assumptions aside from grade and really it remains robust in terms of cash flow. The question remains whether the DL2 can keep up decent grades, maybe > 50 or 60 gpt, over distance to depth and as the move farther out the vein. I think it is possible but not certain. The narrow veins caused a concentration factor obviously. If you spread out the same mineralization across a 5m vein the grade would be 10x lower and that would be nearly ‘normal’ for an underground mine.

My only claim is that the operation does not scale easily in terms of tonnage. IMO it will become easier to add new veins with their own approaches than it will be to have 8 or 12 faces serviced by Antonino. How many can they do? 4 or 6 maybe with Antonino? That is alot of trips for that poor scoop. They could put another approach like Antonino elsewhere perhaps. But they have no existing workings there. So why not start up the Caren instead where you have a starting point? Just questions for the future.

Also the dilution factor seems like it raises the question of counter factors like some small bit of processing / enhancing before trucking.

Approach tunnels, faces, processing etc. these are all things Auryn has already mentioned in the past. I only pointed out a simple mechanical explanation that Auryn had clearly already been considering. It would be obvious to them. That’s why they brought up the idea of multiple faces a long time ago. I have just pointed out there is just a limit of how many you can support with one Antonino. So I just think it will be a smallish tonnage operation for some time to come until they can develop further.

So → here’s to another 10 or 20 years in AURYN / MDMN :slight_smile:

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EASYMILLION: “Same grades at 1840 meters across the entire ADL?”

Good catch, Easy - THIS has me sitting on the front 2 inches of my chair!

And don’t forget the additional assays coming from DL2 - “soon”, maybe in February(?) due to current time requirements for assay processing.

Cornhusker brings up interesting points as to production possibilities/limitations. But, something tells me MC is on top of all this - would he advance so much personal funds for this investment without first having thought through all this? It would definitely be interesting to get his perspective on these (what I would term) logistical issues.

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138

Probably planning on doing just that at a shareholders meeting. :+1:

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139

Finally a breakthrough for the ADL!!
IMO, a significant price moving event will be the AUMC share distribution to Mdmn shareholders.
There have been pps games for years with this stock.
Maybe wrong here but anxious to see how many Mdmn shares are really out there and should be exposed upon Aumc distribution

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Solid, grounded, detailed and informed post. I believe the BB’s would rather not post about the engineering/realities of chasing a small vein underground b/c mining multiple faces and spewing cash flow is always a bit more sexy. Unfortutnately, there hasn’t been much “innovation” in underground mining with the exception of some mechanization. Even well funded operators are forced to working within the geological constraints of the deposit.

As it relates to guessing the on all is sustaining cost (AISC) during the eventual exploitation stage, I would be shocked if they are anything less than $1200-$1300 per ounce, specificaly to CH’s points above. Without scale, which is not realistic in the this specific project, its nearly impossible to bring down your cost (regardless of grade because you have to blast and dilute). The best funded, best run miners are challenged to bring costs under $1000oz.

20,0000 tonnes a year assuming no interruptions at a dilutive grade of 20gpt (being generous), and $1200 AISC is stil a decent small mine:

12,500 ounces annually- net profit of $700oz at today’s prices = $8,750,000 in annual cashflow.

Nothing to sneeze at and there is clearly upside if/when gold ralliles. The problem, without an reserve, mine plan, or block model to use 1) they will need to be very good and lucky to follow the vein all the way through and 2) the market won’t assign much value b/c the extent of the veins/resource/mine life is unknown.

If Maurizio is planning on organically expanding the project through ultimate cash flows this can be very favorable from a dilution standpoint. I’m not sure how you can justify today valuation of AUMC (~$40M) even when assuming they are in production…5x cash flow is pretty generouus if the mine life is unknown.

Its not worth trying to value the other projects which could have huge or zero upside b/c there hasn’t been nearly enough work to make a determination. Maurizio may decide to take some of the cashflow to advance those assets. No idea

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I’ve posted quite a bit on BRICS on the “FWIW - Focus on Global Economy” although no one here seems interested. There’s a lot that’s going on in the currency wars between the IMF, CBs & countries aligning to replace the reserve currencies in place at the IMF. You may well be correct about the AISC. POG may be a game changer, so I thought I’d throw this out here since I’m limited to only two posts on the thread where it may be more relevant. I did grab this off the internet, but don’t know where to give credit, however I did come up with the title. POG is effecting the other producing mining stocks I have in my portfolio that I have actively been accumulating.

Price of a Barrel of Oil – Petrodollar vs POG

In August 1971, when the Bretton Woods agreement was abandoned, crude oil was priced at $3.56 a barrel and the market price for gold was $42.85. Converting this into ounces of gold per barrel gives us a value of 0.0831 ounces. Today, the gold price of oil is 0.0417 ounces per barrel, roughly half. In other words, using gold Glazyev can demonstrate that the true cost to OPEC+ of dollarisation has been to halve the value of their export revenues since the Bretton Woods agreement was suspended. By accepting a new trade settlement medium tied to gold, this US enforced erosion of oil values will cease. And to compensate for the loss of oil’s value from the ending of Bretton Woods, the gold price in dollars would have to be double that of today at over $3,800…

Now is a good time to be getting in “well drilled” speculative stocks IMO. AUMC is NOT in that traditional category and is in a category of it’s own. So, I remain awaiting more information before I take it out of the sock drawer.

MDMN may well gain some liquidity and become a trading stock on news, but I’m not a day trader. I’m just not interested in that when my money is spent on more reliable stocks that you seem to prefer. I suspect others may well jump aboard that daytrading train, but only with a very noticeable increase in volume and sustainable, frequent news.

Thanks for your imput Baldy, as I think your latest post is quite realistic at this point. Things may change, however, if the MDMN distribution awaits a price target of several cents. That would ideally take the few available AUMC shares in the float to climb substantially higher first. The strategy that can accomplish this is results of the continued progress and cash flow being made. 3,000,000 shares can become quite volatile on news, and if sustained, will drive the MDMN price per share much higher. I’d like to see MDMN climb 10X or more before any distribution takes place.
EZ

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