Am I reading this correctly and production has started?
Why not use the funds from production to fund a floatation plant?
Read what it says. Offtake was based on type of ore and recovery rate. Thus, the extensive testing.
Issue shares and raise a few million to begin building a mill now, or limp along with what you can send by truck to ENAMI and trust for an honest payout that will take a year or two to pay for the mill on your own.
All depends on the cost of the capital. Debt financing was never possible at this stage. But Goldlogic looks like they were willing to finance and buy dore if the ore was the recovery grades and methods worked.
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You’d have to ask someone more knowledgeable on the cost of building an onsite plant. I think we’ve had this discussion and depending on the size it could cost north of $10M. We already owe Maurizio several $M. If you wait on the slow rate of production to fund the plant, we will be watching paint dry for another two years plus the time to build the plant.
I did read what it says! He never considered how we would finance scaling up production when he was spouting off about low capex and non-dilution. He only started to get warm and fuzzy on the offtaker financing us as if it was a slam dunk when Auryn mentioned discussions with Offtakers. And low and behold, its not! The ore is not conducive to gravimetric techniques. What was all that BS about the Sepro/Falconer again?
Dang. Too bad this wasn’t suitable for gravimetric processing. Goldlogic’s website and approach looks like it would have been a major win at 2 ounces per ton.
Oh well. Now they’ll either finance and build the mill quickly, or bootstrap from production and take a couple of years. Either way - hitting the DL, achieving ventilation, and starting small scale prodction is a win. It should cash flow itself form here, even if it is slow.
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Thanks Wiz. Back to sleep for me. Adios amigos…
“Auryn is considering several options …”
If they finance, 3/4+ of the dilution will go to AURYN, they will absorb the BULK of it. Yes, we will take a hit, but it remains to be seen. Do you think Auryn wants to get bent over the chair?
Evaluation of financing for a flotation plant will be critical - how much equity will we have to give away to get financing? Any “experts” around who can tell us?
What are you talking about? What ever dilution Auryn undergoes so do we as MDMN owns a stake in Auryn. My lord.
Ummmm … yes, the same RATE of dilution, but Auryn will have the largest dilution dollar-wise.
I don’t think Brecciaboy was totally wrong, as he was assuming there was a good reason an offtaker was even entertaining the deal (pretty reasonable in my book). They even mentioned the name of the offtaker, Goldlogic. I think it was clear Bald Eagle was suggesting that such an agreement was pretty much impossible for us, given that we had not already drilled out the entire property to prove to an offtaker the future production. As it turns out, we would be in business today if the ore had turned out to be subject to gravitation. Close, but no cigar.
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And yet we now KNOW such an offtaker was indeed considering a deal with us, right?
There’s a lot more Bald Eagle said, but I’m not gonna waste my time. If you want to hate on Brecciaboy, be my guest - but he knows his stuff, and in my estimation has been VERY MUCH on target.
Who do you think is going to fund the private placement? Maurizio and his friends including the new BOD members. This is their ticket to capture even more of the pie for themselves. Baldy has pointed out all along that MC could easily wipe us all out whenever he wanted. Is it commendable that he offered an interest free loan up to this point? Yes but he also got this whole property for a song because of the corruption of the old guard. A white knight, yes but only in a partial sense. Remember how much dilution has already occurred by MDMN once owning 50% of the whole property to now only owning under 25% of it. Very convenient for himself in the same regard that he was able to snatch this all up while being related to a scam artist. So he is wise to tow the line and not completely eviscerate the MDMN shareholders.
Yes we all would have enjoyed watching Baldy eat crow if our ore met the standards and Goldlogic advanced us the financing. But that is exactly why he doesnt engage in irresponsible conjecture like BB does. Brecciaboy has talked all along like these were givens. How do you talk about non dilution and low Capex when there still was no definitive idea on how much it was going to cost us to startup meaningful production? It was plain irresponsible. I’ll be the first to say that Baldy is way too overpessimistic but BB is doing none of us any service typing in all caps about how thankful we should all be that we are about to commence production with no dilution and it will be a low Capex operation. How can you say that when we have no transporation or ability to scale this yet?
Two points.
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an MOU and/or a non-binding term sheet are about as valuable as used toilet paper. Terms sheets get flung around like confetti in the mining industry. Companies are always willing to engage, take a look around, and see what’s what. It’s a very long mile b/w an MOU and a binding-term sheet.
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I know GoldLogic. You will read that one of their whopping 3 deals is with the micro cap producer, Soma Gold (a name I’ve referenced on this board several times). GoldLogic would not be considered a legitimate offtaker. They have a small Fund that essentially does gold pre-purchases but they call it a life of mine offtake.
I guess we’ll never know if they ultimately could have gotten a deal done with these guys but you have to ask yourself why it would take a week, let alone several months to identify the refractory nature of the ore. This is something that most onsite techincal geos could identify without the need for any labratory analysis, let alone a “specialized lab in Peru”. Enami could have told them that. Seems odd but I guess it’s worth praising the company for their transparency.
FWIW. A floatation circuit will cost ~$10M. I’m involved with a company who’s in the process of building one in Peru as we speak. It took them about a year to get the necessary permitting. They also needed to spend $2M edifying the roads. Given what I can observe on the road to AUMC’s site I would guess they would need to spend a lot more.
As a positive, they are finally moving forward with shiping material to Enami. This will be a slow, low volume process but they should be able to break even over the short-term and start paying down the debt over the medium term. While I can already anticipate BB lathering over the 57gpt gold grade I would be very careful in extrapolating anything from something identified as an “experimental batch.”
My best guess is that they slowly start moving ore down the mountain to Enami and start the process of applying for permits after they are able to design the appropriate design for a floatation plant. I highly doubt they will be going to the markets for an equity raise within the next year.
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And then Brecciaboy’s habit was to go on and say things like it “appears” things will turn out like such and such. He ALWAYS qualified what he was saying - so that even the most NAIVE who were reading his posts should have been warned. I guess it didn’t work.
And this isn’t about enjoying watching Bald Eagle eat crow (even though he shouldn’t exaclty be riding his high horse right about now). I do respect his opinion, and those of anybody else, especially when they are backed-up by facts he can cite. Why would he tell us that an offtake agreement wouldn’t even be considered for us - when it was already obvious one was? Did you not SEE that clearly?
I’m of course sorry things didn’t turn out the way we all wanted, but you sitting there saying Brecciaboy is “irresponsible” is an unwarranted emotional response. Go have a drink or something.
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We clearly aren’t entering into any sort of meaningful production levels without the need for financing (failed from an offtaker) or more dilution. You should not have been shouting this accomplishment. So he funded us at zero% interest so that we have the ability to produce and ship at a snails pace and still nowhere in sight of getting the market to assign higher valuation. Thats where we are at. Time to just admit there is very very loooong way to go here and bringing the type of speed we all want is going to cost an arm and a leg. So no use celebrating non-dilution and low capex when it would take 2 more years minimum to even have the ability to finance ourselves. And then what? How long does a mill take to build? And then how much more time to pass to actually post some noteworthy figures that will get the market’s attention? Nobody wants to be looking at 5 year timeframes to get this stock back up to a penny. Shoot me
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Thanks for your opinion.
$10 Million is a LOT - they’ll have to have a BUNCH of that 57.5 g/ton ore to make it, I think we already KNOW they have a bunch of ore sitting around that’s 14 g/ton, right? That should be a start - they should invest in a few more vehicles and get cranking. I don’t know about the others here, but I remain a “do it on your own” rebel - do NOT give anybody else the opportunity to rob us any more than we’ve already been robbed - and I’m NOT talking about MC, I’m talking about his predecessors.
The 57 gpt is good to see, but not shocking given the historic results of the mine at this location. So that’s the positive. The idea of getting to the very location where you had historic results of high grade production achieved its aim. They have been at this spot for a long time and have had access to the original workings for even longer. They should have known the nature of the ore a long time ago. I suspect the ENAMI approach was always the default approach and only a late evaluation of a new option led to the testing and latest delays.
The problem obviously with the ENAMI approach now with high fuel prices is that shipping is quite expensive. They will need the grades to remain high to remain profitable enough to continue shipping.
Questions:
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How much do they have to cherry pick ore to achieve this grade? Set off explosives, scoop the floor, throw it in the truck and go? Or Set off explosives, hand filter by picking around in the remnants, and then throw it in the truck and go? Any manual filtering that was done historically or in this latest effort will limit the ability to ramp up volume because it will take a long time to do. This is the core problem with narrow veins. Cost of production including shipping, all-in-production cost, is a big question.
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So we have high grade confirmed under some type of process they at least know how to do. They can probably apply this to maybe 2 faces at once without too much more development cost. How consistent is the width and grade of this vein going both directions? This historic report indicates variability. Assuming 57+ gpt production across the length of the vein is an unproven assumption. We are going to find out as they go.
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We will soon need to hear a plan on when they are going to start repaying the debt financing owed MC. This will come out of current production. If they start repaying right away this will delay the ability to self-finance higher production and probably push in the direction of some other type of financing.
Most likely they will need to produce for the second half of 2023 to get a feel for how production goes given the current constraints and how much it costs them to produce, investigate the costs and benefits of the various improvement options, and maybe even start some permitting once they have some answers.
Significant risks include increasing production costs and significant very narrow sections of the vein that can not be economically produced.
Lots of questions. Plenty of risk yet. But 57 gpt production will make up for a lot of difficulties if it can be sustained.
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I think I recall them having removed some 24,603 tons or ore while constructing the Antonini adit, right?
If one truck load is 16.7 tons, then it would take about 1,473 trips to get it to Enami - and if it comes in at 14 gpt, then assuming 900.00 ore it would pay us right at about 9,999,929.03 (24,603 tons x 14 g/ton / 31 grams per Troy ounce x 900.00 per ounce = 9,999,929.03). Would Enami pay us 900.00 per ounce? Maybe that’s an incorrect assumption.
If we had FOUR trucks, wouldn’t it take about 184 days at two trips for each truck per day? (1,473 trips / 4 trucks / 2 trips per day = 184 days). Could they do 3-4 trips per day to Enami? Don’t know.
On top of that, don’t we have a bunch of ore lying around that has already been tested at 14 gpt? I’m projecting this same 14 gpt ton onto the ore from the Antonini adit - is that too high a figure? Just thinking out loud here - there HAS to be a way around this!
If, as Auryn says, the ore we can ship to Enami is:
Gold - 57.5 gpt
Silver - 978 gpt
Copper - 3.23%
Then of course my numbers above turn out to be better. I don’t know how to convert these numbers to “gold equivalent” ounces, but just considering the Gold at 57.5 gpt, multiply the gross proceeds by about FOUR, which pays for that $10 Million flotation plant a lot quicker. Then, I guess subtract the transportation cost?
As Cornhusker says, there are unanswered questions - maybe we get answers soon via production numbers they say they will provide us.
Here’s what they said:
“We will promptly report financial results from these dispatches.”
“We’ll be extracting minerals directly from the Don Luis vein for processing at ENAMI.”
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