Happy New to all of you! Only 20 years invested so far. Could 2024 be the Year?
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2024 sounds like a good number! Gold looks to breakout over 2100 
Happy New Year!
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It is amazing. Different strokes for different folks. Readers on this forum can make their own determination on the the past, present and future implications of the difference in analysis.
A couple quick points to that are worth stating. I realize that debating each point with BB is like trying to convince someone that the sky isn’t blue. Sometimes individuals become so lost and/or committed to their POV that no amount of facts will convince them to change their position. For what its worth, I’m willing to change my position, and have become incrementally more bullish on AUMC over a long period of time, after conversations with the company and a considerably lower valuations, but, IMO BB is still so off the mark, its worth addressing his “analysis.”
The company has specified EXACTLY what the tonnage was. In April they sent 120kg to the lab(s) in Peru. This is the equivalent of 265lbs. If they are comparing whatever they sent to Enami with the results of the Peruvain lab we can only rely on the 120kg (smaller sample set) as the base case for analysis. How can someone who spends soooo much time parsing through company updates miss this fact? If those samples were 100gpt material they would literally be a bucket of ore.
If a company is making decisions for 100’s of thousands/millions of processed tons, I think its fair to say that 120kg is an infintesimally small.
I never accused managemetn of “fraudently removing anything.” Again, the company publicly stated they were taking ore directly from the vein for the sample. This isn’t fraudelent or even irregular. However, taking ore from a vein is considered “high grading” and in no way represents the blended ore from production.
Its worth noting the same individual performed the same rigourous data analysis when entering an LOI with Goldlogic. This led to another dead end b/c of the refractory nature of the ore (something than any junior geo could identify outside of a lab setting).
At the end of the day labs can’t analyze thousand of tons of material b/c that’s not what they are set up to do. Nothing odd about the size of the sample but it does not allow for rigorous analysis of an entire project.
The company told us that the labs were analyzing 265lbs of material and it took several months to receive results. Even if one hoped that the lab had received more ore the new results probably won’t be generated until the new year.
This one if my favorite. Is BB claiming that AUMC didn’t simply subtract the difference in GPT from Enami to the lab in the Peru to determine the $5,000 financial impact?? If I was in his shoes I would probably try the same deflection but the numbers don’t lie. Keep in mind that the reports they received from Enami and Peru were received well before any decision was made to proceed with the froth floatation. The sequence of company updates don’t lie but, after spending months claiming that the $5,000 delta was some sort of elaborate analysis I can understand why one would cling to that theory. But…a 72gpt delta is the equivalent to a $5,000 “direct financial impact.”
It’s worth stating, any of the above “differences of opinions” could be confirmed or negated via a brief conversation with the company. None of the above would be considered “inside” nor proprietary information that would infringe on the good Doc’s ability to acquire more shares. Sometimes individuals are so lost in their analysis that they would rather NOT know the facts.
Quick point of clarification. A smelter is not a refiner and its important not to confuse a copper smelter with a gold refiner. The smelters peform the pyrometallurgical recovery of the contained metals. The refiners (which are the muli-billion facilities referenced in your post) perform the hydrometallurical process using agents like cyanide and sulphuric acid to produce refined, high-purity gold that essentially what you think of when buying gold bars and coins. Ore processed through CIL/CIP is what the offtakers love as they will then send that material to the refiners (not the smelters) after paying a discount to the contained materials. That’s where the Trafigura, Glencore, Traxys, etc make all of their money.
The froth flotation makes a lof sense for AUMC. Often the only choice turns out to be the right one. Having to raise equity financing to pay for it isn’t ideal but the company can start small, using a modular approach. My main concern is what they will do will all of the tailings. They will clearly need to get the appropriate permitting but its hard to envision where they will put all of that stuff on the top of the mountain.
I would imagine/hope that the company will provide more details on this along with the preliminary engineering design, costs, etc for the flotation circuit in the next couple of updates. These things take a lot of time and, given they only recently made the decision to go this route, they are still working through the details.
Why are you minimizing the significance though? Its a no brainer not to pay 72gpt equivalent fee to Enami versus building a froth plant. That’s also why they are stockpiling and not shipping in the meantime, a question you asked repeatedly in a condenscending tone everytime. If we can average 20gpt (your hope) at the top of the mountain and run that material through the froth circuit, we should be profiting $50M+ annually once production is in full swing.
You don’t look to invest millions unless you are confident that your return is going to be many multiples of that. Thats simple risk reward analysis, doing otherwise is just poor business sense. Seems to me you can’t bring yourself to admit just how big this is going to be. Instead you slide your commentary more and more to the favorbale side without resisting the burning urge to trash BB along the way.
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Jimmy. I’m not sure you understand anything that I have posted. If they average 20gpt that would be more than 66% less than the entire positive “financial impact” the company has cited.
I have been very transparent on moving towards a more positive bias. The stock is down 99%. Still am not long any shares, thankfully, but I wouldn’t be here is there was no price I would buy. But we are getting to the point where there might be some value if they meet my expectations over the next few years. Maurzio and the share price stills needs to work through some disappointments b/c of the crazy predictions offered here but life goes on
I understand fully what you posted. The $5,000 impact is based on a “high graded” sample. It still emphasizes the point that it is illogical to pay that high of a % of a fee versus treating the ore on site. I’m not using $5k per ton anywhere in future projections. You can scale the fee way down if we are avergaing 20gpt, but proportionately it is still insanely high as compared to treating it on site.
Simply based on 20gpt with our own treatemnt facility and decent production rate with gold at current levels equals very impressive profits. Let’s just all agree on that.
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WHAT’S THE BEST INFORMATION WE HAVE TO DATE IN PREDICTING THE AVERAGE GRADE OF GOLD ORE AURYN IS CURRENTLY MINING AT THE DL2 MINE?
If you dare to predict likely average grades for gold production from the DL2 Mine, you need to follow some rules and know the history of the deposit. The larger the sample size, the more statistically accurate your estimations will be.
At the DL2 Mine, we’re extremely fortunate in that this vein was in production from 1940 to 1970. The artisanal miners in this operation mined a 350-meter strike length of the vein down to about 100-meters of depth. They mined about 4 to 5% of the known dimensions of the DL2 Vein. That is a very impressive “sample size”.
The operations had both a “Mom and Pop” aspect to it in that only 2,000 tonnes were mined over the course of 30 years, but it also had a more serious character to it in that the miners constructed 7 vertical shafts/”ventilation raises” and 5 “ventilation/safety egress chimneys” to the surface. They did a wonderful job in “setting the table” for Auryn to come in underneath where they ceased operations, at about the 1,860 meters above sea level elevation, which allowed Auryn to tap into this vast network of pre-existing “ventilation raises” so that Auryn’s operations could have significant “SCALABILITY” from the point of view of a significant ventilation system and a significant emergency egress system for safe mining.
The high level of “SCALABILITY” comes from Auryn’s new found ability to simultaneously mine from various levels under level 3 in a safe manner. This was cemented into place by SERNAGEOMIN’S signing off on the new ventilation and safety egress system which, in turn, allowed Enami to place Auryn on the Chilean Mining Registry rolls which allows Auryn to make regular shipments to Enami if they so choose. This work of the artisanal miners in conjunction with the SERNAGEOMIN sign off, increased the “value” of the DL2 Mine by many millions of dollars and saved Aury several years of work.
The artisanal miners averaged 64 gpt gold in these operations AFTER ENAMI TOOK OUT THEIR FEES. The artisanal miners had no “beneficiation” facilities on-site to enhance the grade of the ore over the intra-adit “head grade” or “run of mine grade”. Within that 100-meters of depth that the artisanal miners mined, although the “AVERAGE” was 64 gpt gold, the grades ranged from about 54 gpt gold in the top third near surface, to about 64 gpt gold in the middle third, to about 74 gpt gold in the bottom third of that vertical expanse. Auryn has recently commenced mining at about 15-meters below where the artisanal miners were averaging 74 gpt gold.
Both Richard Sillitoe, probably the most accomplished Economic Geologist, in the history of mining and Rob Cinits from ACA Howe Mining Consultants agreed that, as is the norm in other MESOTHERMAL VEIN SYSTEMS, both the grades and widths are improving with depth at the DL2 Mine. The question becomes, what should we temporarily “pencil in” as the estimated average gold grade that Auryn might accomplish during their mining efforts first al level 3 and then below level 3. A different question might be, is there some reason why Auryn shouldn’t be able to match the grades achieved by the artisanal miners who used the technology available from 1940 to 1970. Because of the size of this 2,000 tonne “SAMPLE”, I’m going to have to assume that this data would have to be looked upon as the most statistically accurate data available. Obviously, the time element has nothing to do with the grade of the gold present currently at level 3 and below.
WHAT FRESHER DATA DO WE HAVE?
On Jan. 4,2023, when the Antonino Adit finally intersected the DL2 Vein at the new level 3 of the mine at the 1,840 masl elevation, 2 groups of vein “channel samplings” were undertaken by the Auryn geoscientists. The first group of 4 separate channel samples revealed an average grade of a robust 164 gpt gold over 0.6-meters width. For benchmarking purposes, the average grade of gold mined today worldwide in similar underground vein operations is 4.18 gpt gold. The second group of samplings came in at an average of 150 gpt gold. Clearly, the “increasing grade with increasing depth” pattern remains intact.
Subsequent to these assays, Auryn sent samples of DL2 Vein ore to 2 separate SMELTING facilities. The sample sent to the Codelco/Enami Smelting Facilities came back with an average grade of 57 gpt gold, 978 gpt silver and 3.3% copper. The sample sent to an independent smelter in Peru came back at 128 gpt gold.
OTHER COMPLICATING FACTORS
Auryn reported some assay results many months ago, from DL2 Vein sampling done in the “old works” of the artisanal miners, at levels 0, 1 and 2. These were from a limited amount of production Auryn did in this area. The results averaged 85 gpt gold. Interestingly, the comment made was that this production was done “WITHOUT BLASTING”.
After successfully intersecting the DL2 Vein via the Antonino Adit and after getting the blessing of SERNAGEOMIN, Auryn went into production and noted that they were producing “DIRECTLY FROM THE VEIN”. In my experience, vein mining typically involves mining from the “working face” of an adit. The working face will typically contain a centrally located “vein proper” surrounded on each side by less well-mineralized “wall rock”. Holes are drilled into the working face, dynamite or ANFO is stuffed into the holes, the blast is initiated and the blast debris falls to the adit floor. All of this material, containing both material from the vein proper as well as the surrounding wall rock, is scooped/”mucked” up by a wheel-loader, and delivered to the on-site crusher.
Usually, the width of the adit, remains at about 3-meters. So that heavy equipment can pass through. I’m not sure what Auryn means by stating that they are mining “DIRECTLY FROM THE VEIN”. First of all, are they “blasting” or are they still removing ore without blasting as they did recently in the “old works”. Secondly, are they doing “split blasting”, where they blast the vein material first, scoop it up and deliver it to the crusher, and then come back and blast the less well-mineralized wall rock and bringing it to surface and placing it into a different pile? Are they using narrower equipment and just blasting the vein material and leaving the wall rock alone? Clarification is obviously needed.
SUMMARY
In a situation like this, perhaps the best approach is to forego any estimations of the grade of ore that Auryn is likely mining until those grades are presented to us. The caveat might be to not be surprised just in case the numbers are off the chart. “HIGH GRADE GOLD ORE” is typically defined as any grade over 7 or 8 gpt gold.
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Hallelujah! It only took 25 years but wiser words have never been typed on this board.
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I see BB as one of the few on TMP who actually demonstrates wisdom & logic based on available info, not to mention civility and professionalism. He thoroughly explains all the steps it takes him to ponder any variable possibilities. BB doesn’t play King Kong games. I wonder how much longer before we see wiser words from your posts.
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If past is precedence I’m fairly confident in saying that you don’t/won’t have the capacity to recognize those “wise” words whenever they are presented.
For historical context and some cliffs notes here are a few of my key assertions thus far:
Les and insiders were conducting a massive fraud through illegal issuance of shares: Proven accurate
Even though AUMC represented that they were fully funding through production when they acquired the CDCH/MDMN assets this was inaccurate as, at the time, they were actively looking for financing: Proven accurate.
Despite multiple claims that AUMC had entered “production” there has not been a single dollar recognzied via the handful of shipments supposedly sent to Enami. All of the premature celebrations about entering production were misplaced: Proven accurate with the caveat that they could have theoritically used proceeds to pay down the “third party debt” (highly unlikely and should have been disclosed).
There is no way that a project at this state of development could attract a normal offtake agreement for financing: Proven accurate. They couldn’t even close on an “abnormal” offtake.
The shares in AUMC and MDMN were extremely overvalued based on any comparitive analysis: Proven current as the share prices are both down over 90%.
Anyone looking to have exposure to these assets would be better served buying AUMC over MDMN. Proven accurate. They have both been creamed but AUMC has held in better, on a relative basis. This being said, the ratio is now so out of whack that MDMN now looks to be the better play (even taking into account the accured expenses and costly exercise of conversion).
The shares in AUMC and MDMN could be entering an attractive entry point in the high teens equivalent for AUMC (MDMN is already there): To be determined.
The high end of possible GPT over any normal course of production could/should be as high as 20gpt. Any analysis on a 2k tonnes of material high graded (hand picked) by artisenal miners over a 30 year period holds zero value:
To be determined.
AUMC is depending on an infintesimally small sample of ore to make existential business decisions: Proven accurate by the company’s own press releases as was the calculation for the $5,000 “economic impact”. Some here didn’t even notice that the company quanitified the 265lb sample sent to the Peruvian labs (NOT the Peruvian smelter)
AUMC does not represent the 1 in 10,000 miners able to get into production without dilution: To be determined. The lack of MR/MR has clearly been a major obstacle for the company and, in retrospect, they clearly should have spent some time and money definiing the resource. The company has admitted that they are pursuing equity financing to pay for the froth floatation but that is an open question. Worth noting that MDMN/CDCH were already diluted by 90%+ under JJ and Les’s tenure, and an additional 90% following the AUMC acquisition, and are still NOT able to claim production 7+ years later. Also worth noting that the dilution was incorrectly justified at the time b/c of the “assets” they brought to the table under the concept of a smaller slice of a bigger pie analogy (proven inaccurate as those assets still have no recognizeable value)
Do I even need to say who took the opposite side of every one of these assertions?
We will see how the rest of the “to be determined” and other developements pan out. IMO, the next update will address, definitively, at least one of the TBDs.
FWIW, if you find my posts to be too abbrasive I would encourage you to go back and read the opinions of CHG, Coldsnow, Hurricane Rick and even Wizard. While they often offer views different from mine, they are clearly more grounded in reality vs. some of the more avid posters as of late.
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New topic for 2024. Best New Year to all!
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