Sorry but it does not take over 2 months to get back results. Even through heavy Covid it didn’t take that long. I believe they are waiting on something but it is not results.
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Hi Done Deal,
I think one could make the case that Auryn is already in “LIMITED PRODUCTION” but just not shipping the ore they’ve been “producing”. When they recently completed the 5-meter wide by 7-meter long by 4.5-meter tall “gallery” they stockpiled 80 tonnes of yet to be sorted “mineralized ore”. They removed about 425 tonnes of rock in total ( 157-cubic meters of rock multiplied by the specific gravity of granodiorite at 2.7) and about one-fifth was “mineralized”. Part of the “gallery” contained DL2 Vein material and part was composed of the “hanging wall” of the DL2 Vein and part composed of the “foot wall” of the DL2 Vein.
This now completed new “gallery” will allow the wheel loaders transporting the recently-blasted ore to back away from the working face with a full bucket and then pivot and turn 90-degrees and head out the ANTONINO PRODUCTION ADIT towards the plateau surface. It also provides a spot for “LOAD HAUL DUMP” (LHD) vehicles to park and be loaded by the wheel loader. This is why the “gallery” is so tall (4.5-meters or about 14-feet). If you deploy LHD’s to transport the ore to surface along the ANTONINO PRODUCTION ADIT, then the wheel loaders can get back to the blast site at the “working face” quicker which will ramp up the PRODUCTION RATE.
In regards to the “ventilation/safety egress chimney”, this “PRODUCTION” is being taken out of DL2 Vein material and it will include some of the surrounding wall rock. All of the vein material, along the path of this “raise”/chimney will be removed as if they were mining out a horizontal adit. The “old workings” up above this level 3 were centered on the DL2 Vein material which is what the artisanal miners were mining. What Auryn is doing is tracing the path of the vein upwards, at a 20-degree angle from the floor of this NEW LEVEL 3 ADIT, until it intersects what are now empty (air-filled) “stopes” from where the vein material had been mined by the artisanal miners. These are full of fresh air because they are connected to the plateau surface through a series of 7 shafts and 5 chimneys. This fresh air is the key to being able to safely mine multiple levels at the same time. It gives the project SCALABILITY or the ability to rapidly ramp up production.
We are no longer in the Antonino Adit where Auryn intersected and crossed 24 new “structures/veins” that they had no IMMEDIATE interest in. The “prize” at the finish line of the Antonino Adit was the DL2 Vein, that Auryn KNOWS to contain extremely high-grade gold. The Antonino Adit has now become the ANTONINO PRODUCTION ADIT. At the terminus of the Antonino Adit, where it intersected the DL2 Vein, Auryn made a 90-degree turn to the NNW and a 90-degree turn to the SSE. FROM HERE ON OUT, this is all extremely high-grade “PRODUCTION”, probably destined, in the short term, for the on-site crusher or for a stockpile on the plateau prior to being crushed and beneficiated/concentrated in a fashion outlined by the results of the COMPREHENSIVE METALLURGICAL ANALYSIS performed in the 2 labs in Peru. Auryn will probably be mining this DL2 Vein, with its 1,000-meters strike length (at surface) by at least 700-meters depth, for decades depending upon the PRODUCTION RATE they can achieve.
This “ventilation chimney/raise” was estimated to be about 30-meters in length. This would necessitate the removal of about 729 tonnes of “RUN OF MINE” ore including ALL OF THE EXTREMELY RICH VEIN ORE along its course. I’m going to assume that they will not ship this stockpiled ore until it is “beneficiated” by whatever process is identified by the 2 specialty labs in Peru as leading to the maximum recovery rate. If Auryn is in the process of inking an OFFTAKE AGREEMENT with an outside party, then I’m going to assume that this new partner has probably already been promised this INITIAL PRODUCTION as part of the deal.
If you beneficiate/concentrate the ore on-site and get rid of some of the “gangue”/waste rock on-site, then the TRANSPORTATION CHARGES will be lessened, on a per ounce of gold produced basis, as you’ll be shipping less worthless rock. Auryn wants to keep as much of the “gangue” on-site as possible if this is a “cut and fill” operation. The worthless “gangue” becomes the “fill” that is placed back into the empty stopes where the valuable ore has been removed. This stabilizes the mountain for subsequent mining activities.
During the construction of the approximately 450-meter long “Antonino Adit”, based on adit widths and heights of 3-meters each, the Auryn miners will have removed about 10,935 tonnes of rock which I assume has been stockpiled but not assayed yet. This would fill about 650 truckloads filled to 16.7 tonnes each, if it were shipped which it will probably not be until it can be beneficiated substantially. During that drifting of the adit process, Auryn intersected approximately 24 mineralized “structures/veins” that they were previously unaware of. The width of these intersections measured from a few inches to about 7-feet. The average grade of this rock is unknown and will probably be considerably less than the grade of the extremely rich DL2 Vein ore itself which averaged a SHIPPING GRADE of about 64 gpt gold. This ore included some of the less well-mineralized wall rock taken as part of the mining process by the artisanal miners. Their mining efforts were so inefficient that the ore they discarded on-site still averages 14 gpt gold.
When they were drifting the Antonino Adit, you might remember how Maurizio went on-site and did a video interview showing all of this blue-colored ore that was pretty much ubiquitous. This is an extremely rich form of copper known as “BORNITE”. It is 63% pure copper. This was not contained in a vertical-oriented vein. It was contained in a horizontally-oriented “zone” most likely a SUPERGENE ENRICHMENT ZONE. These can be hundreds of meters thick and represent where the historical water table used to be. When BORNITE is exposed to air and it “weathers”, it will convert (via “oxidation”) into CHALCOCITE which is 79.8% copper.
What happens is that the oxygen contained in rain water/”meteoric water” “oxidizes” a form of iron sulfide near surface known as “pyrite”. This results in the production of an acid. The acid dissolves the nearby copper and converts copper “sulfide” into copper “sulfate” which is soluble and gets dissolved. It trickles downwards and ends up piling up at the level of the water table where it is converted into extremely high-grade forms of copper known as bornite, chalcocite and covellite. These SGE zones often overly “PORPHYRY” structures. Because of their extremely high-grade copper, these SGE zones are rapidly mined out and there aren’t very many of them left on the planet still being mined.
I would guess that some of those 11,000 tonnes of rock removed from the Antonino Adit will end up being beneficiated via a “flotation” process that will remove the unwanted sulfides. After that, I would guess the portions deemed “ECONOMIC” will be destined for either an SXEW plant or a copper smelter. You might remember some of the sampling along the course of the Antonino Adit came in at 5.3% copper. The average grade of copper being mined worldwide is 0.6%. The grade of copper within the DL2 Vein came in at 4.5% in the initial samplings at the intersection of the DL2 Vein and the Antonino Adit.
For now, however, with the gold grades being found within the DL2 Vein, (approximately 150 to 164 gpt gold) a vertical structure, all eyes are probably on the gold content of that vein and soon on the other 6 Main Veins. When an “ORE CONCENTRATE” has significant levels of both gold and copper, it is very likely that the final destination will be a copper smelter after being treated with “gravity plants” and possibly “flotation”. Hard to beneficiate/”refractory” ore will probably be destined for a “roasting facility”. The metallurgical engineers will compute all of the associated costs and determine the most ECONOMIC FLOW SHEET to determine how to treat the ore to insure maximum recovery of the sought after metals.
What perplexes me is how finding all of that BORNITE within the Antonino Adit, that overlies the Pegaso Nero copper-moly area on the southern downslope, hasn’t resulted in the inking of a strategic alliance (probably a JV) with a major to explore and hopefully develop that area if deemed economic.
AS FAR AS “PRODUCTION” GOES AT THE ADL MINING DISTRICT
- Depending on the fate of the 11,000 tonnes already removed during the construction of the Antonino Adit, this might be looked upon as “Phase 1” of PRODUCTION that is currently stockpiled. Some or perhaps most of this will probably end up as being “fill” if this is a “cut and fill” operation. It might be the COPPER content of this ore that is the most desirable especially that mined after the adit walls suddenly turned blue from BORNITE.
- Phase 2 would then be the gold (and copper) production associated with the construction of the “gallery” (about 80-tonnes of “mineralized ore”) and the “ventilation/safety egress chimney” (probably several times that 80-tonne figure). This was scheduled to have been completed by June 30,2023.
- Phase 3 would probably be the mining of the 2 working faces on level 3 (one oriented to the NNW and one to the SSE) that do not need a “decline spiral” to access. These have already been accessed. THIS “LEVEL 3” IS GOING TO KEEP AURYN VERY BUSY MINING EXTREMELY HIGH-GRADE GOLD ORE FOR A VERY LONG TIME.
- Phase 4 would probably be the construction of the “decline spiral” to access the various sub levels below level 3. These new sub levels represent both EXPLORATION AND EXPLOITATION/PRODUCTION. If the grades or widths of the DL2 Vein at any given sub level are particularly favorable, then management will probably SELECTIVELY mine out these areas first. In mining, this is referred to as OPTIONALITY. The other 6 Main Veins within this overall “VEIN SET” also represent OPTIONALITY as well as SCALABILITY.
- Phase 5 would probably involve going after the Merlin 1 Vein. Recall that an exhaustive trenching program done at the “M-1” vein involving 1,500 meters of trenches and over 200 samples revealed a “weighted average grade” (very accurate) of over 26 gpt gold RIGHT AT SURFACE. These are insanely high grades to be found at surface within a trench. The Larrissa Production Adit has already been drifted. The ventilation system needs to be enhanced prior to commencing production. Interestingly, both the Merlin 1 Vein and the DL2 Vein show “bonanza” grades at the 1,840 meters above sea level elevation. These 2 veins are part of a 7-member “Vein Set”. Might the other 5 Main Veins have similar findings at the same elevation level?
- Phase 6 would probably involve going after the other 5 Main Veins to determine if they too are ECONOMIC. With the price of gold approaching all-time-highs, Auryn is going to need help in rapidly exploiting the high-grade gold in this overall VEIN SET while the price of gold is high. I believe that this is what Professor de la Tierra, Maurizio’s confidant from the University of San Sebastian who headed up Underground Mining Operations at the immense El Penon Mine of Yamana Gold, was referring to when he predicted that the ADL Vein System is destined to become “a similar operation” to that at El Penon. El Penon is mining 4.8 gpt gold, however.
If all of this GEO-JIBBERISH seems a bit complicated, concentrate on the GRADES about to be revealed as production goes forward. Use as a benchmark the fact that the average grade being mined worldwide in similar underground operations is 4.18 gpt gold and dropping by 6% annually. When you factor in “open pit” gold mines the average grade being mined worldwide is about 1 gpt gold.
The story here is all about radically atypical GRADES. From an AVERAGE SHIPPING GRADE point of view, the mining operation at the DL2 Vein was going gang busters from 1940 to 1970. The PRODUCTION RATE was not huge and was more in line with artisanal mining. During those 30 years of production, 2,000 tonnes of extremely high-grade was shipped.
When Pinochet took control in the early 1970’s via a military coup, mining operations came to a screeching halt. He started stealing high-grade mining operations from their owners and gifted them to his political cronies. The artisanal miners at the DL2 Vein dynamited shut all of their tunnels and adits to avoid detection. Unfortunately for the miners, the Pinochet dictatorship lasted for 17 years. A couple of groups tried to resurrect the mining operations but they lacked the financial wherewithal and technical expertise to make it happen. Auryn came along and consolidated all of the various disparate mining concessions in the area and consolidated it into the ADL Mining District.
What happened in the intervening 53 years was that the price of gold went up 56-FOLD and the technology needed to mine the gold and beneficiate the ore made marked advances. The grade of the ore, of course, remained the same. Now Auryn has the opportunity to recommence production at a time when the price of gold is approaching all-time highs.
Doing good due diligence necessitates HUMILITY in a complex environment like that involved in mining. We investors, including myself, need to keep in mind that when compared to professional geoscientists that have been working in this environment for all of their lives AND THAT, AFTER SIGNING OFF ON NDAs, HAVE A MUCH BETTER VISIBILITY OF THE FACTS INVOLVED AND THE BEHIND-THE-SCENES ACTIVITIES, that we do not always have a good appreciation for the facts. The question becomes, what are the “brainiacs”, that have signed off on NDAs and that do have a good view of behind-the scenes activities doing. Some of these “brainiacs” include the 2 new appointees to the Auryn BOD that just risked their reputations by becoming involved. Professor de la Tierra would be one of them. The mining professionals submitting MOUs with attached TERM SHEETS in order to purchase the ore concentrate that Auryn will be providing would have to be included. Maurizio cutting checks right and left would also have to be included.
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Anyone? The silence is deafening.
As fun as it is to capitalize PRODUCTION, that unfortunately does not make it true. Specific to an offtake agreement, it would be valuable, at least to me, to hear from some of the mining folk on this board. Is it possible to attract offtake financing without a defined resoure/mine plan? What level of concentration of the ore would be needed for an offtaker to be willing to transport the “beneficated” ore? (offtake agreements do not involve mined ore but rather need to be a concentrate or dore) Would an offtaker provide financing before a concentration circuit was already in place? Is there an adequate water source up there to allow for proper concentration at scale? Would an offtake be possible before AUMC secured all of the permitting for an onsite circuit (minimum 9 month timeline for permitting)? Why/how can it take 4 months to analyze a bucket of ore and why does it need to be sent to Peru? Why would a company with the potential for “millions” of tons of ore sit on a measly 11,000 tons when they could have sent to to Enami, generated cash flow, and demonstrated empirical results on grade and mettalurgy? Why does an NDA even need to be signed at this point?? (grade results from a Peruvian lab are not proprietary nor "behind the scences. They are SUPPOSED to be made public!)
I hope a few of these questions are addressed in the next update as I trust most here are getting a bit tired of the spin offerered by some that have, literally, never been on target.
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I’ve said the same thing, and it’s my #1 question right now. IMO, the rest is only noise. I don’t feel MC intends to screw other shareholders or to resurrect the past bad behavior of prior management; however, supposedly AUMC is an operating company, who has been digging holes in the ground, finding ore seams, making improvements on the site, and has a plan. Well? IMO, any other company who had the ability to generate revenue but left it sitting around a warehouse gathering dust would fall into three options 1) run incompetently, 2) doesn’t really have something sitting around which could generate revenue and is not being truthful, or 3) has developed a different plan to better the company. Since we have had silence on #3 (and no, I don’t feel the mention of an offtake agreement counts because it does not have details. Kinda like a car manufacturer with a prototype at a car show, doesn’t mean they are making the car) and no updates, then I feel we only have two choices left, neither of them good.
I feel AUMC needs to get the existing ore sent to Enami or provide details as to why they are not doing so. Even if it’s a response of “the ore hasn’t been processed as we work with our partners to finalize the offtake agreement” But silence?
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Chile copper recovery remains elusive as July exports drop
From mining.com, Aug 7, 2023:
https://www.mining.com/web/chile-copper-recovery-remains-elusive-as-july-exports-drop/
– madmen
I have a lot of copper at the Pegaso I can sell if anyone is interested.
Replying to jak’s statement. Why isn’t this ore being sent to processor??
This mined ore could be its own demise … It has to come off that mountain! The only road I think they are using is that switch backed, goat trail,up and down that mountain.
Limiting who ever is driving the ore in that china truck down it. .
Thats part of the mix. C.s.
If that is the case, then there is no point in mining this property at all as none of the ore will ever get off the plateau. Road condition is an old excuse for not executing. They managed to get the wheel loader delivered along with the truck and other equipment. I will wait for the published excuse, but I will not provide one for them.
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I trust these folks at Auryn, whose ownership interests are aligned with ours, to do the right thing - and the best thing for us, which would be the best thing for themselves. And I don’t want them putting news out there prematurely either. If there was good news and it was appropriate to share, I think they would do it. Let them play their cards with whomever they are dealing with - and we’ll see how it shakes out.
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Had a dream last night that MDMN went to .29 in one day of trading when News came out!
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From your lips to God’s ears.
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The last we heard from Auryn management was a tweet that stated: “AURYN management is delaying the quarterly update, “pending results”. Once results have come in, management will provide an update with current information along with the Q2 summary.”
In the most recent “Quarterly Update”, dated April 6, 2023, management cited 2 main goals for Q-2 of 2023. These had to do with intersecting the “old workings” (levels 0,1 and 2) via the construction of a “ventilation/safety egress chimney” and performing a COMPREHENSIVE METALLURGICAL ANALYSIS OF A 120 kg sample of DL2 Vein ore at 2 specialty labs in Peru.
The assumption would probably be that the “pending results” being referenced would be the results from the “COMPREHENSIVE METALLURGICAL ANALYSIS” (CMA) being performed in 2 specialty labs in Peru. The “pending results” comment of Auryn could also be referring to the intersecting of the “old workings” via the new “ventilation/safety egress chimney” and how that project is coming along. These 2 tasks are indirectly linked in that Auryn can’t go full speed ahead on production until BOTH are completed.
It could be argued that the single most important phase in the process of putting a mining project into production is getting the “METALLURGY” down cold the first time around. In order to maximize the ECONOMICS, you need to have the METALLURGY dialed in. This process will result in a FLOW SHEET indicating which beneficiation measure to utilize in order to maximize “RECOVERY” and in what order to deploy those methodologies. The first kick at the can is usually through inexpensive and environmentally friendly “GRAVITY PLANTS”. Gold is insanely dense with a SPECIFIC GRAVITY of 19.3 tonnes per cubic meter. This makes it amenable to being separated from less dense “gangue” components via the use of centrifuges.
The CMA will reveal the optimal size of the ore particles allowing the maximum recovery of the sought after metals. The artisanal miners at the DL2 Vein also ran a CMA and the optimal particle size came in at “minus 200 Tyler mesh”. The beauty of mining a project that has already been in production for 30 years is that your predecessors have already blazed the trail and probably made plenty of mistakes to learn from.
The optimal particle size then tells management what type of crushers and grinders to deploy. The CMA blends in with the ENGINEERING, PROCUREMENT, CONSTRUCTION (“EPC”) process. Several parties have already tendered MOUs, at least one of which had an accompanying TERM SHEET, with the goal of purchasing the ORE CONCENTRATE that Auryn is about to produce. Auryn management seemed to be enamored by one particular bid which mandated the use of environmentally-friendly “gravity plants”. It appears to be incumbent upon Auryn to prove to this party, if they are chosen as the OFFTAKE PARTNER, that the DL2 Vein ore is amenable to being beneficiated by the methodology they appear to be mandating.
In my experience, the bidding process for an OFFTAKE AGREEMENT cannot be in full bloom UNTIL the CMA is in the hands of Auryn, the potential OFFTAKE PARTNERS, and the END USERS to whom the OFFTAKE PARTNERS would sell the ore concentrate. For example, if the CMA found that the optimal recovery was reached using a certain particle size and the deployment of 4 beneficiation methodologies (A,B,C and D) in a certain order, and if Auryn chose to deploy methodologies “A” and “B” on-site, then any OFFTAKE PARTNER would need to identify an END USER (perhaps a smelter) capable of deploying methodologies “C” and “D”.
If the “results” that Auryn management is waiting on to relay to us shareholders involves the CMA results as well as the choice of an OFFTAKE PARTNER, then this might explain why things seem to be taking so long. Auryn would no doubt prefer to have a robust bidding process with a lot of participants once the CMA results were available for distribution to all interested parties. Some OFFTAKE AGREEMENTS are for LIFE OF MINE so you might as well do it right the first time. OFFTAKE PARTNERS often play a role in providing inexpensive project financing. Both Auryn and the OFFTAKE PARTNER will make more money if production ramps up rapidly.
Why might the one party that submitted an MOU with an accompanying TERM SHEET insist on using 2 specialty labs located in Peru? I would assume that they have a pre-existing relationship of trust with these 2 labs and perhaps that confidentiality is important to this potential OFFTAKE PARTNER. We were told that these 2 labs have access to special gold processing methodologies that the Chilean labs, Auryn is used to be dealing with, don’t possess. The 2 labs may or may not be running the same tests in parallel, in a double-blind fashion, so that Auryn can really get the CMA dialed in effectively. Different labs have different QA/QC policies that might be a factor.
Again, you need to get the METALLURGY dialed in correctly the first time. The ECONOMIC RETURN is highly dependent upon this. It’s not clear if these 2 labs have access to technology associated with certain special “gravimetric plants” that Chilean labs don’t possess. If Auryn is interested in dealing with this particular OFFTAKE PARTNER, then I would think it would be wise to let them dictate the particulars. The overall goal is to improve the profit margins associated with sending the ore to Enami as has been done in the past.
What I think you’ll notice is that once the CMA is in hand, progress is going to accelerate. Until you have a CMA in hand, however, management is hamstrung in many regards. They don’t know the particulars of a lot of the equipment they need to procure until the CMA is completed. You can’t cut deals with OFFTAKE PARTNERS until you have the information contained in the CMA. OFFTAKE PARTNERS, in turn, can’t cut deals with END USERS until this information is made available.
Once we have a better feel for anticipated PRODUCTION RATES as well as the specifics of any OFFTAKE AGREEMENT, we’ll be in a better position to make some rough projections as to potential profits. A completed CMA provides VISIBILITY to existing shareholders as well as prospective investors. An institutional investor will not give you the time of day until their ECONOMIC GEOLOGISTS have a completed CMA to study. If a junior explorer with a discovery needs the financial wherewithal or technical expertise of a major miner, the major will insist on a completed CMA. A completed CMA is kind of like an admission ticket to a better future. The CMA is an integral part of any PREFEASIBILITY or BANKABLE FEASIBILITY STUDY.
From Auryn’s previous work, we know that the DL2 Vein ore responded well to a “gravimetric plant” manufactured by Sepro/Falconer. The artisanal miners had difficulty in recovering small-particled gold known as the “fines” and about 50% of the ore was composed of “fines”. Auryn was able to achieve a recovery rate of over 90% for the DL2 Vein ore with this equipment during a test. Today’s “gravimetric plants” feature technology that recovers not only the “fines” but also the “ultra-fines”. “Knelson” and “Sepro” are two of the main manufacturers using this technology. These plants are typically located within the “crushing and grinding” circuit of a mining operation. Many of these plants are modular and can be delivered on a trailer. The CMA testing will give us an indication of the “GRG” which is the “Gravity Recoverable Gold” content.
What’s a little bit scary is realizing that without any of this advanced technology, the artisanal miners of the DL2 Vein ore still were able to achieve an average SHIPPING GRADE (to Enami) of 64 gpt gold over the course of 30 years. Approximately 2,000 tonnes of ore was shipped in that time period. This 64 gpt SHIPPING GRADE is about 15-times the average grade of gold being mined today which is 4.18 gpt gold for underground operations like this one. The efficiency of the artisanal miners was so bad that their on-site discards are running at 14 gpt gold today.
When the artisanal miners at the DL2 Vein experimented with a crude 4-cell “flotation” system designed to remove sulfides, they were able to get that 64 gpt gold figure up to 92 gpt gold. In 1970, when they experimented with an undisclosed beneficiation methodology (probably using gravimetrics), they were able to get that 64 gpt gold figure up to 102 gpt gold. The $64,000 question becomes what kind of pre-beneficiation and post-beneficiation grades were achieved during the CMA testing of that 120 Kg (264 pound) sample. The CMA results will help both Auryn and any interested observers estimate both their CAPEX COSTS as well as their OPEX COSTS (operating costs).
It appears that this is going to be an extremely low CAPEX type of project. As far as MINE CONSTRUCTION goes, most of that is already done. MINE CONSTRUCTION involves accessing the ore either via a vertical shaft or a horizontal adit. Auryn chose the latter. It also involves creating a conduit for the ore to be shipped from the working faces of the adits to the surface. Both of these MINE CONSTRUCTION tasks were completed by the completion of the Antonino Production Adit. The “gallery” has also been completed. It will provide a location for the wheel loaders to turn around and a spot to load “LHD” (Load-Haul-Dump) trucks if they are deployed. “LHDs” will allow the wheel loaders to return to the working faces more rapidly.
As far as MINE CONSTRUCTION goes that leaves the completion of the “ventilation/safety egress chimney” which was scheduled to be completed by June 30, 2023. This will allow the mining of level 3 (that of the Antonino Adit), via 2 separate working faces. One will be oriented to the NNW and one to the SSE. After that, the “decline spiral” needs to be constructed in order to access the various sub levels that will be simultaneously mined with level 3. In many gold projects, MINE CONSTRUCTION is a multi-year endeavor that costs tens of millions of dollars not to mention the untoward DILUTION of both the share structure and the ownership percentage of the project.
The artisanal miners did a lot of the heavy lifting in regards to the MINE CONSTRUCTION by putting in 7 vertical shafts (“A” through “G”) as well as 5 chimneys exiting at the plateau surface. This will serve as the ventilation/safety egress system that will allow the safe mining of many levels at one time i.e. “SCALABILITY”. Maurizio has made it clear that the eventual plan is to do all of the processing on site and actually pour the dore bars on site. As far as mining the other 6 main veins and the Pegaso Nero and LDM properties if deemed economic, that’s anybody’s guess at this point.
You’ll notice that Auryn was able to take a path much different than probably 98% of the junior producers. Typically, a junior explorer will have to sell shares in order to raise funds to commence exploration. If they find a good prospect, then they’ll need to sell more shares in order to work up the property and hopefully define some drill targets.
This is followed by raising yet more money in order to drill out the property in order to attract a major miner to either tender an offer for the company or to enter into a JOINT VENTURE STRATEGIC ALLIANCE to co-develop the property until a POSITIVE PRODUCTION DECISION can hopefully be made. Along the way the junior would need to raise money in order to execute an “ORDER OF MAGNITUDE” STUDY (“SCOPING STUDY”). If that went well then they would need to raise money to do a PRE-FEASIBILITY STUDY (“PFS”). If that study found success, then any willing financier is going to demand a BANKABLE FEASIBILITY STUDY (“BFS”). The CMA would be incorporated into the PFS and BFS. If everything went well, then a POSITIVE PRODUCTION DECISION would ensue and the project would get the green light.
Auryn was able to bypass many of those steps, AND ALL OF THAT DILUTION, prior to coming to a POSITIVE PRODUCTION DECISION. The previous 30 years of being in production (albeit at a low production rate) as well as the well-documented HISTORICAL SHIPPING GRADES averaging 64 gpt gold, allowed Auryn to bypass the need to fully drill out the deposit.
The mining done by the artisanal miners at the DL2 Vein involved mining a 350-meter stretch along the surface strike of the 1,000-meter long vein to a depth of about 100-meters of the 700-meter known depth of the vein. In all, they mined about 5% of the vein. In a longitudinal cross-section of the mountain, the mined portion would form the shape of a rectangle.
What Auryn needed to do, prior to coming to a POSITIVE PRODUCTION DECISION, was to sample the working faces of the adits on levels 0,1 and 2, where the artisanal miners ended their mining efforts. This included the sides and bottom of that rectangle. Auryn executed a ‘SYSTEMATIC SAMPLING PROGRAM” on the sides of that rectangle. The results came in at an average of 85 gpt gold. At the base of that rectangle, Auryn took 3 sets of samples. The first involved 12 samples taken from the area where Shaft A intersected Level 2. These averaged about 150 gpt gold.
This corroboration of the HISTORICAL SHIPPING GRADES led to a POSITIVE PRODUCTION DECISION by Auryn and the plan to drift the Antonino Adit to intersect the area immediately beneath the “old workings” in the middle of that 1,000-meter strike length. When they finally intersected the DL2 Vein immediately beneath the “old workings”, Auryn did 2 more groups of samplings. The first came in at an average of 164 gpt gold and 4.5% copper. The second came in at “about 150 gpt gold”. In reality, the POSITIVE PRODUCTION DECISION was a bit of a no-brainer due to the HISTORICAL SHIPPING GRADES as well as the SYSTEMATIC SAMPLING PROGRAM completed. NOTE THAT IF THE HISTORICAL SHIPPING GRADES WERE IN BETWEEN, PERHAPS 3 AND 5 GPT GOLD, AURYN WOULD HAVE HAD TO PROCEED LIKE MOST OTHER JUNIORS WITH A DISCOVERY HAVE TO.
WHAT WAS THE NET EFFECT OF AURYN TAKING THIS APPROACH VERSUS THE MORE STANDARD APPROACH PRIOR TO COMMENCING PRODUCTION?
The 2 keys here are Maurizio’s willingness to fund all of Auryn’s exploration and development activities needed prior to commencing production while charging no interest as well as the work done by the artisanal miners and the HISTORICAL SHIPPING GRADES they achieved. There was no need for a major miner or an outside financier that would have mandated a formal drilling program as well as formal scoping, prefeasibility and bankable feasibility studies. This allowed Auryn to circumvent massive levels of SHARE DILUTION and percentage ownership of the project DILUTION.
THE IDEAL SCENARIO IN THIS SECTOR WOULD BE FOR A JUNIOR EXPLORER/DEVELOPER TO ENTER INTO EXTREMELY HIGH-GRADE PRODUCTION AT A TIME WHEN THE PRICE OF GOLD IS APPROACHING ALL-TIME HIGHS WHILE RETAINING 100% OWNERSHIP OF THE PROPERTY AND A TIGHT SHARE STRUCTURE. AN ADDED BONUS WOULD BE HAVING MANAGEMENT BEING WILLING TO ADVANCE ALL OF THE FUNDS NEEDED TO COMMENCE PRODUCTION WHILE CHARGING NO INTEREST AND WHILE OWNING OVER 60% OF THE SHARES IN A SEMI-RESTRICTED FORMAT DUE TO RULE 144.
THE IDEAL SCENARIO WOULD ALSO INCLUDE PLENTY OF SCALABILITY OF THE PROJECT DUE TO AN ENHANCED VENTILATION SYSTEM PERMITTING THE SIMULTANEOUS MINING OF SEVERAL SUB LEVELS AT THE SAME TIME AS WELL AS OPTIONALITY INCLUDING 6 OTHER MAIN VEINS TO SIMULTANEOUSLY MINE IF THEY ARE DEEMED ECONOMIC. IT WOULD ALSO BE HELPFUL IF ALL OF THIS OCCURRED AT A TIME WHEN NEW GOLD/COPPER MINING DISCOVERIES WERE AT AN ALL-TIME LOW AND THE DEMAND FOR THESE METALS WAS EXTREMELY HIGH. THIS MIGHT SEEM LIKE AN AWFUL LOT OF STARS TO LINE UP AT THE SAME TIME. THAT’S BECAUSE IT IS.
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Me, sittin’ here with popcorn waiting for Baldy to chime in… 
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Not much needed to respond to BB’s latest diatribe. Keep in mind that these “pending results” are on a sample of ore that weighs less than most hardy men in the US. It simply does NOT take 4 months let alone 4 days to generate the most comprehensive of mettalurgical assays on this small sample or rock.
More relevant, just to highlight how misinformed BB is on the topic of an offtake agreement, the “CMA” is important but any offtake agreement would NOT involve selling a concentrate to a third party. OFFTAKE AGREEMENTS ARE MADE WITH PARTIES WHO TAKE THE CONCENTRATE AND PROCESS THAT CON AT THEIR OWN REFINING FACILITIES TO PRODUCE PURE GOLD/METALS. THERE IS NO THIRD PARY INVOLVED.
“In my experience, the bidding process for an OFFTAKE AGREEMENT cannot be in full bloom UNTIL the CMA is in the hands of Auryn, the potential OFFTAKE PARTNERS, and the END USERS to whom the OFFTAKE PARTNERS would sell the ore concentrate.”
In the experience of a dentist who midnight’s as a geo pontificator penny stock promoter that is not how actual offtake agreements work. Just as important, there is no legitimate party that would commit to any financial partnership based on a 300lb sample of rock. To simplify, if two parties are considering an offtake agreement, there is no scenario where the financier would commit a penny of investment based on the mettalurgical results of a small boulder when considering the economics of an entire mountain.
Candidly, I couldn’t stomach reading the balance of BB’s post but I encourage any actual investor in AUMC/MDMN to share any of his posts with a knowledebalbe mining professional. This is laughable stuff.
Interesting to me is simply reading the Wizard’s posts.While I appreciate he’s not a big fan of mine, its pretty clear from his posts that the painting BB is trying to paint is way outside the lines of reality (even from an insider’s point of view). One of my mistakes as an early investor in MDMN was the assumption the BB had an inside line of communication with management. That assumption couldn’t be further from the truth.
I would love to arrange a Zoom conference call with anyone who was interested in joining. This would not have to be some sort of sparring match b/w BB and myself but rather an open debate on what we know, what we think we know, and maybe the participation of some real life unbiased mining professionals that we could invite to join the discussion. Happy to organize if there is an appetite to do so. What a great opportunity for folks to argue their positions without hiding behind an alias on a message board
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And what is your thoughts when the conversion of shares finally takes place? We sit and pounder.
Keep in mind that these “pending results” are on a sample of ore that weighs less than most hardy men in the US. It simply does NOT take 4 months let alone 4 days to generate the most comprehensive of mettalurgical assays on this small sample or rock.
It might … if you ship the ore samples over the Andes via mule train. Just keeping with the spirit of speculating on just about everything here …
CHG
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Since the shipment of Ore is very crucial part in future dealings I would assume it was not shipped by mule! Lol! I would think that they would have shipped the quickest possible way especially when they have the money bags waiting also for the results.
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I’m interested in a call.
August 2023 – Shareholder Update
Aug 10, 2023
AURYN Mining Corporation Shareholder Update
AURYN Mining Corporation (OTC: AUMC) is pleased to share the following update with its shareholders.
ACCOMPLISHMENTS
Antonino Tunnel
AURYN Mining Corporation has successfully extended a 40-meter ventilation chimney, connecting our Level 3 tunnel to the historic Level 2 tunnel structures. This significant enhancement accelerates ventilation after drilling and blasting events within the Antonino Tunnel, streamlining operations. Notably, this development has substantially improved our safety standards. Following a rigorous evaluation, the mining authorities have formally accepted our updated ventilation measures. Our commitment remains steadfast to operational excellence and safety.
Lab Works and MOU / Term Sheet
After comprehensive metallurgical testing at a specialized laboratory in Peru, we’ve identified that our ore possesses a refractory nature. This characteristic means it is unsuitable for gravimetric processing, a fact which directly impacts our initial plans with Goldlogic.
Originally, our intention was to employ gravimetric processing methods and then sell the concentrates to Goldlogic, as laid out in our MOU and term sheet. Due to the refractory nature of our ore preventing gravimetric concentration, we are unable to proceed with our agreement with Goldlogic.
Adjusting to these circumstances, we’ll be extracting the mineral directly from the vein and transporting it to ENAMI for processing through Direct Smelting. However, to ensure efficiency, scalability, and improved margins, the establishment of a flotation plant is in our purview, given that this method is the most effective for our ore’s composition.
We remain committed to deploying the most efficient and beneficial techniques in our operations and value the ongoing understanding and support from our shareholders during these critical adjustments.
Ore Production Update
On July 4th, ENAMI granted us the Mining Register, which authorizes the delivery and sale of minerals from our operations to ENAMI. This encompasses both Direct Smelting and Flotation Recovery techniques – the latter specifically for mineral shipments with reduced gold concentrations. On July 19th, we dispatched an experimental batch of minerals to ENAMI’s direct smelting plant. The settlement results, received today on August 9th, are as follows:
- Gold (Au): 57.5 g/t
- Silver (Ag): 978 g/t
- Copper (Cu): 3.23%
Our dedicated team is currently active at the mining site, focusing on producing and accumulating minerals directly from the vein. Our goal remains to consistently dispatch these high-grade minerals to the designated facility at ENAMI.
University of San Sebastian Projects
Throughout this quarter, the university’s research teams continued their projects. In June, when weather permitted, they evaluated our operations for the practical implementation of their findings. By the end of June, two significant project reports were finalized:
- Automation Project: This centers on the integration of exoskeletons for physically intensive tasks such as drilling and lifting heavy objects. We are in talks with two Chilean suppliers to trial and procure lumbar and upper back support exoskeletons for our crew.
- Antonino Tunnel Water Management: A cost-effective system has been devised to capture, treat, and repurpose the water from the Tunnel for all mining operations. This initiative paves the way for a sustainable approach to our water resources.
Other notification
Q3 2023 – OBJECTIVES
We remain committed to extracting high-grade minerals from the Don Luis vein while advancing the construction of the Antonino Tunnel. All extracted minerals are designated for processing at ENAMI plants, utilizing both direct smelting for the high-grade output and flotation for yields with concentrations under 20 g/t.
We will promptly report financial results from these dispatches.
Following our recent metallurgical insights from the Peruvian laboratory and our inaugural mineral consignment to ENAMI, we’re evaluating the potential for a dedicated mineral flotation plant. This initiative aims to amplify our production in Altos de Lipangue and expand into other lucrative sectors of the mining district.
OUTLOOK
Communications
AURYN will continue to publish required financial disclosures at OTC Markets. Quarterly shareholder updates will also be released on OTC Markets and on our website during the first week of each calendar quarter along with a gallery of images and videos. To receive notification of these via email, subscribe on our website. For occasional intra-quarter updates, follow @aurynmining on Twitter.
Mining
Having successfully completed the ventilation chimney and having received the outcomes from our metallurgical studies and experimental batch sent to ENAMI, our mining team is set to continue operations within the Antonino Tunnel. We’ll be extracting minerals directly from the Don Luis vein for processing at ENAMI. Concurrently, we’re embarking on a technical and financial assessment for the establishment of a flotation plant.
Financial
To date, a third party is paying for AURYN’s exploration efforts. AURYN’s Board of Directors is monitoring expenditures with a commitment to reimburse the third party (without interest) from production. There are 70,000,000 common shares issued. Regarding the establishment of a floatation plant, AURYN is considering several options, including raising funds via a private placement.
For further information please visit our website, https://aurynminingcorp.com.
Submitted on behalf of the Board of Directors.
Forward-Looking Statements
This news release contains certain forward-looking statements within the meaning of the United States Securities Exchange Act of 1934, as amended. This forward-looking information includes, or may be based upon estimates, forecasts and statements of management’s expectations with respect to, among other things, the completion of transactions, the issuance of permits, the size and quality of mineral resources, future trends for the company, progress in development of mineral properties, future production and sales volumes, capital costs, mine production costs, demand and market outlook for metals, future metal prices and treatment and refining or milling charges, the outcome of legal proceedings, the timing of exploration, development and mining activities, acquisition of shares in other companies and the financial results of the company. There can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially and substantially from those anticipated in such statements. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that mineral resources will be converted into mineral reserves.
Contact Information
Auryn Mining Corporation
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Well there you have it. DILUTION.
Baldy was right again and BB was off target. You wouldn’t be contemplating private placement if you had debt financing options.
Brecciaboy its about time you admit that all of your talk about being on the brink of production without having to go through dilutive measures was pie in the sky talk. There was no viable way to begin any meaningful production without a major dilutive event. How could you continue spouting off about low Capex when we had no established way to sort or transport any meaningful size of production? I’m now firmly in Baldy’s camp, those were irresponsible postings.