Baldy, can you where Auryn stated they won’t be doing MRMR? Please explain you arrived at your conclusion Auryn won’t conduct MRMR based upon its current share structure, so a mining neophyte like me can understand. Also, how does classifying the rock structures assist in the type of mining Auryn looks to perform? Right now, Auryn has only indicated certain things (see post above) and have left a lot of unanswered questions and I don’t remember them stating they aren’t going to conduct MRMR.
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TraderRich, again, for the neophyte miners among us, why do you feel an open pit is the only way Medinah/Auryn shareholders will receive any value for their shares? Based upon Auryn’s reports, they look to focus on a more artisanal mining approach of following the high grade veins and shipping ore from those veins (although as I posted above a lot of unanswered questions still exist). Why will this approach not provide any value to shareholders? Can Auryn use an artisanal approach now to generate cash flow to fund and open pit analysis?
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Sorry I’m not baldy. Correct me if I’m wrong, but I think baldy says that AURYN will need to generate MRMR. But BB posted that Auryn won’t need to dilute shares and they should have cash flow into production. (from what I understand):
The share structure doesn’t support it because there’s not enough value (market cap) which means it would be highly dilutive. They could theoretically issue shares in AUMC but I can’t see any institutional/family office, HNW money subscribing b/c there’s no liquidity (and its currently expensive).
If AUMC was going MRMR route it would have already happened. Like I said, the “assays” they released don’t mean much because they don’t offer dimensions/length or mineralization, etc. When a company conducts a drill program to define a resource its across dozens if not hundreds of drill. They are then able to conduct a pre feasibility study which will include inferred resources along with an early attempt of valuing the asset, how much it will cost to mine and, most importantly a block model. The block model is key as it sets the road map of how to exploit the resource. The alternative is basically chasing a vein which is extremely challenging (as has been witnessed).
I assume AUMC will slowly collect assays as they mine which will lead to a version of a MRMR. Just not one the market will be able to value. They could also use a portion of cash flows (if there are any) to invest in a drill program for other tenaments. As an example, you really can’t advance an open pit without a block model.
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I don’t have the answer to any of your Q’s. I’m just a stupid technical trader. If you look at the top of the post of mine that you’re responding to, you’ll see that it’s a response to DoneDeal who asked if anyone had a copy of an old post by a person we were referring to as “Volcan”. I have all kinds of crap saved in emails from longer than I can remember so I dug it up and posted it here. That’s all I got. Sorry. 
Thanks, helps me get a better understanding. Follow up question(s), if Auryn slowly collects assays and begins generating cash through ore pulled, does this “chasing the vein” approach also have a value to the shareholders and/or larger mining companies? Does it just take longer than drilling? If, hypothetically, Auryn keeps “chasing the vein” over the next year and continues to generate cash and get great assay results, won’t Auryn have created a value for shareholders and/or a larger mining company to look at the project? Or even allow Auryn the ability to borrow to expand operations, look at open pit feasibility, etc.?
Thanks TR, just thought I’d ask. If anyone else has an opinion or insight, let us know.
In underground mines it is very common to only do a limited amount drilling. Unlike a pit mine design where you outline the pit, the depth, get a model with estimated grades throughout the mine, get total tonnage, mine life estimate etc.
Typically large above ground mines can be much higher tonnage, much higher mining rates, and often require very high capital investment for all the equipment etc. This leads most often to a dependency upon financial institutions to fund the construction. And financial types want all the data to decide if it is a good investment (risk vs return) for their capital for years to come. So the bigger the mine, the more it follows this model.
If you do not require someone to think well of you and lend you money and you are willing to risk your own company’s capital, you can do whatever you want. And trying to get accurate proven reserves for example on an underground vein can be extremely expensive and inefficient because there is so much variation in the underground veins that to meet the technical requirements for reserves or resources is very pricey. Pretium Resources, for example, drilled hundreds of thousands of meters and still had problems with disagreement from the results on what the average grade would be of their deposit.
It is typical for an underg=round operator to drill enough to map out the location of the vein and get initial values so they can plan their business for two or three years ahead and probably add resource ounces two or three years ahead while removing the ounces already mined. Over time with experience with a specific deposit you can get some idea of resources or reserves with less drilling than would take at the beginning. Only occasionally do operators attempt to drill enough to lay out reserves for the life of the mine. They will instead try to map a vein’s surface extension etc. and do some drilling to get an idea but not enough to meet the proven / probable requirements. One could argue that entire model is in a way a product of the large high volume financed surface mining business.
There are some exceptions. Hecla, some 10 years ago drilled enough at the bottom of the Lucky Friday underground mine (which has been producing for decades), to show there were decades left in that massive vein thousands of feet deep in order to finance a $400M new shaft construction. They had to show return on investment to get money they did not have. It all comes down to whether you need money and need the data to convince the financial types they should give you money.
There are examples of currently producing mines that never had reserve reports. Just follow the vein and take your chances. It’s is much cheaper. It has some additional risk.
Auryn will eventually do some drilling probably even within the Fortuna mine. They will have to eventually make decisions on where to stop following the vein horizontally, how much deeper to follow it, when it makes more sense to develop other veins etc.
The problem BE refers to is that the market is commonly not overly favorable to companies that do not have long mine life visibility. Why invest if the mine is great today but you don’t know how many more days it has left. Auryn will have a number of ways to address this to some degree IMO. But this is an issue with modern underground mining as compared to giant above ground open pit mines with decades of known mine life. The big mining companies and the big financial institutions love those especially when capital is cheap and they can throw lots of money at things.
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Thanks Cornhuskergold!
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STATUS: Waiting on additional assay results from the “fully uncovered” DL2 (Don Luis Major). Maybe this means assays of the entire halo? A couple weeks from January 27? Not sure of the timing here.
“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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Thanks for pointing this out, mrbubba. I have a stupid question about this part of the update:
How is it possible for the DL2 to be “fully uncovered” when they theorize that DL1 & DL2 will converge at some deeper point? I understand that they took samples when they first encountered it, and those results are shown in the update. But they went on to “uncover it fully” and took new samples. In other words, where does DL2 officially begin and end if it’s “fully uncovered”? That terminology must have a very different meaning in the mining world. Or maybe I’m missing something. 
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Well, honestly I’m not SURE - but I believe that uncovering the entire vein means it includes the halo area around the vein itself, which would include some additional mineralization although not as much as the vein proper. I could be totally wrong - the “smart” guys are gonna have to help here,
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Thank you, mrbubba. So you think it may just be the “fully uncovered” width of the DL2, not the length? That is the simple answer I needed, I guess. lol!
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I would think both length and width (not depth) … but I just don’t know.
Nice to see Gold creeping up to that $2000 mark.
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Today gold gets smashed for absolutely no reason. You have the nasdaq up over 300 pits where all the fang stocks missed earnings. Please tell me how is this possible??? Tomorrow payrolls is going to miss and gold will climb again. It’s a monthly cycle of manipulation.
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OOPS, hope you didn’t bet the bank on that prediction ! 
Reading this part of the update again tells me it’s about a week to get assays. On the 18th they continued and sent samples from uncovered DL2 to the lab. Today is the 3rd so seeing the pattern of when assays are received is about a week to let’s say 2 weeks max just for any delays at the lab. Does anyone think we will get the fully uncovered samples results from DL2 next week?
The team continued extending the tunnel through January 4, 2023, and intercepted what appeared to be the DL2. The distance between this structure and DL1 is 3 meters. The team was able to clean enough of the interception to take assays before the scoop suffered breaking issues again and had to be taken off the mountain for repair.
On January 9, 2023, the team received assay results from the ore assayed on the lower portion of the new structure. These are reported in the table below and are consistent with most of the DL assays, taken from the old workings.
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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lol no. I have put too much money in the gold industry, just waiting for gold to start climbing to a point where the whole world starts talking about it so I can sell my miners and get the hell out of dodge. I just hope I don’t have to wait the same amount of time that I have been invested in MDMN which is too long to remember.
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I don’t want to buy shares of a mining company that is producing from 10 or 20 working faces even if they’re making big bucks along the way. That would be too expensive and the growth surge was probably starting to plateau. I want to buy shares of a mining company with either zero or 1 working face in operation that I was convinced would soon grow to maybe 10 or 20 working faces. What might convince me? The procuring of a “jumbo” drill rig which would only make financial sense if it can be kept busy developing multiple working faces. THE PROCURING OF A JUMBO DURING THE DRIFTING OF THE ANTONINO ADIT PRIOR TO THE CONFIRMING OF THE GRADE OF THE ORE AND THE COMPLETION OF THE PRODUCTION ADIT WOULD HAVE MADE NO SENSE WHATSOEVER. It would have been way too risky.
How could I be sure that this company was about to transition that 1 working face into perhaps 10? All that was needed to make that transition would have to be already in place as would a commitment by management of their intent to make such a transition. In the case of Auryn, for me the production adit needed to transport the ore would have to be completed which it recently was. Then I would need further corroboration that the vein they were about to exploit did indeed “have the goods”. I’d say we recently got that in spades with the recent assay results from the intersection of the DL2 Vein and the Antonino Adit. I believe that we are awaiting another suite of samples from this same general area now that the entire width of the DL2 has been uncovered after a recent mechanical breakdown.
After the recent assays were revealed, Kevin made some interesting comments that provided a few of the puzzle pieces I had been searching for. He has been using the description of Auryn’s approach to developing this mining district as “bootstrapping” their way along. They were making progress but it was incremental in nature. The handheld “jack-leg” drills they were using to drift the Antonino Adit were semi-adequate but not exactly high tech. It has finally dawned on me, that the approach taken had to be linked to Maurizio’s personal risk/reward calculus.
An entrepreneur like him is not going to dump tens of millions of dollars into a project without hitting certain milestones that represented a derisking of his investment. I can only imagine the sigh of relief he must have experienced when the recent assay results averaging 164 gpt gold came in. Shortly thereafter, Kevin is posting pictures of the fancy mining equipment apparently in the process of being procured. I think it is safe to assume that it is now TRANSITION TIME and that the process of transitioning from zero or 1 working face to “8 to 12” is upon us.
I like to think about what the ULTIMATE INVESTMENT EXPERIENCE might look like in the mining industry if I ever were to come upon it. The ultimate goal would be two-fold. First it would be to generate a significant EARNINGS PER SHARE figure at the 1 operational working face stage of development. The second would be to establish a DYNAMIC GROWTH PROFILE like the one associated with a company transitioning from 1 to perhaps 10 working faces being simultaneously mined.
This would involve the need to constantly be witnessing that EPS figure transitioning from ‘X” to about “10-X”. Stocks trade at a “multiple” of EPS. In the mining industry, the average is 30.21. Stocks that can generate DYNAMIC GROWTH PROFILES like that described above, are going to be assigned a much richer “multiple” of EPS. Either that or you’re going to be constantly recalculating the new EPS with every incremental addition of a new working face.
HOW CAN YOU GENERATE THE MAXIMUM EPS FIGURE?
The “earnings” variable will correspond to TOTAL PROFITS. You obviously want to maximize this by generating a robust growth profile. Don’t forget the “PER SHARE” part of the EPS figure. The “ULTIMATE INVESTMENT EXPERIENCE” would necessitate a relatively tiny number of shares outstanding. How do you pull that off? Typically, you don’t. A yet to be successful junior explorer/developer typically needs to sell shares at ridiculously low levels just to service the monthly burn rate. The result is massive levels of dilution and the inability to ever operate with a relatively tiny number of shares outstanding. That is unless you have a “sugar daddy”, like Maurizio, willing to advance the funds needed to make it ALL OF THE WAY INTO PRODUCTION at zero interest rate signifying no “cost of capital” in the AISC calculation.
As noted above, this “sugar daddy” figure still needs to operate within his own risk/reward parameters. What this translates into is “bootstrapping” operations at first UNTIL a derisking event occurs and that TRANSITION can take place. The TRANSITION here involved completing the production adit and getting one last peak at the ore about to be mined to make sure that Mother Nature didn’t pull any fast ones. Then and only then is it time to go on the shopping spree that management has apparently been on.
The “bootstrapping” phase would obviously involve slow rates of advancement of the project and a lot of frustration. Investors without the foresight to appreciate that the “bootstrapping” phase would hopefully only be temporary went through a lot of torment which for some ended up in taking a loss.
WHAT ARE THE TIMING PARAMETERS FOR THIS METAPHORICAL “ULTIMATE INVESTMENT EXPERIENCE”?
I am the last person in the world worthy of making the recommendation DON’T BE TOO EARLY. But I think that’s a good concept. You’d want to make sure that the “bootstrapping” phase has or is in the process of coming to an end. You’d like to be able to identify what the derisking mechanism is for Maurizio and whether that process has taken place. I don’t think they’d have the makes and models of the new equipment in hand unless the derisking had taken place. I’ve been telling the people in my investment/study group to keep some powder dry for any announcement mentioning the rental or purchase of a “jumbo” drill rig. This is the embodiment of the TRANSITION. These machines will run circles around “jack-leg” drills. Management doesn’t talk as much as the typical management team of a junior miner. It’s actually very refreshing. Let their actions do the talking. Kevin made an interesting comment recently after the assays arrived. He noted that the “velocity” of advancements was likely to increase.
You want to make sure that the TRANSITION phase is at hand. I’d love to see management put out some guidance as to the timing of the procuring of these new toys. I’m curious as to how long it takes to fabricate one of these “decline spirals” that will link the various levels together. As I mentioned earlier, I don’t want to buy shares of a young gold producer that already has 10 working faces in production. I’d rather ride that DYNAMIC GROWTH PROFILE all of the way to the beach.
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