Hi DoneDeal,
In regards to your comment about any outside financing and the timing of its announcement, Iâm going to guess that the new facility might be a bit more extensive than people might anticipate. The length of the permitting process would be dependent upon the extensiveness of the new facility. In one reference, management referred to it as a froth flotation plant. In another reference they referred to it as a âmilling facilityâ when they said: âManagement is also actively engaged in discussions and presentations with potential investors for financing the construction of a milling facility. This effort reflects our commitment to leveraging all available resources to optimize the value of our mining operations.â
A âmilling facilityâ might be a little more involved than a froth flotation circuit. To me, a âmilling facilityâ might involve primary and secondary crushers, perhaps grinders, etc. The âflow sheetâ that defines the most efficient way to treat the ore, will state the size of the particles that lead to the maximum recovery. Auryn has a jaw crusher on-site, but they may need to add a ball mill or a SAG mill to get the particle size to the optimal dimensions. For froth flotation systems, the average particle size deemed to result in the highest recovery rates is usually about 75 microns.
You could expect a back and forth between Aurynâs engineers and SERNAGEOMIN. Auryn might want a certain design that local regulations might frown upon. Before any financing is completed, all of the details need to be ironed out so that the financier knows exactly what it is bankrolling and how likely it is to be repaid on a certain timeframe.
I would anticipate them having a carbon in leach (âCILâ) circuit sitting right next door to the FF circuit but management has not commented on this possibility yet. The permitting process theyâre going through with SERNAGEOMIN right now, will probably include every add-on that Aurynâs engineers might anticipate over the next decade or two. The FF cells are usually modular and made off-site and then delivered. The same is true of the âCIL cellsâ. Both types of âcellsâ can be added incrementally as the production rates increase as the various sub levels are commissioned. The roll out will no doubt be divided into âphasesâ but the original planning and permitting needs to be all-inclusive.
A âpositive production decisionâ has already been made, so weâre basically building a mine. Youâve got 5 other âMain Veinsâ to consider not to mention the Pegaso Nero, LDM, etc. Thereâs going to be an on-site lab incorporated into the complex. This will greatly aid not just production efforts but exploration efforts by either Auryn or any strategic alliance partner they might attract.
From a more macro point of view, what Auryn really has to do is to hatch a plan to monetize the various non-vein assets like the Pegaso, Nero, the LDM, the breccias, skarns, mantos, etc. Now would be the time to do it and have any future JV partners give their 2-bits worth on how the mill should look and function. Iâm interested in what management meant when they made the above comment regarding âLEVERAGING ALL AVAILABLE RESOURCESâ in conjunction with designing and funding the construction of the âMILLâ. Exactly what âRESOURCESâ that Auryn owns, are they going to âLEVERAGEâ in this mill-building project? Auryn is not going to be able to MONETIZE these various other assets in a timely manner without a partner. There are just too many good prospects present at the ADL.
Iâd love to see one of the ADLâs many deposit types thrown into the mix in regards to the mill financing. You give a JV partner a piece of the action on âXâ asset in exchange for them footing the bill on the new âmillâ and lab. A JV partner interested in one of the other ADL assets would almost insist on an on-site lab to streamline their exploration efforts. Everybody and their brother in the mining industry has vocalized their desire for GOLD-COPPER ASSETS. If there have been any secret admirers lying in the weeds, now, during the permitting phase of a mill, would be the time to chip in your 2-bits worth. Weâll see!
WHY ARE MY ESTIMATIONS OF GRADES AND PRODUCTION RATES HIGHER THAN OTHERS?
I have to go with the FACTS that have been presented both recently and historically and I have to trust the SCIENCE. I am well aware that the average grade being mined in similar ânarrow veinâ underground operations is only 4.18 gpt gold. Iâm also well aware that this figure is dropping by 6% annually because of the lack of new discoveries. Since there is a time value to money, when given the option, miners are going to selectively mine the highest-grade ore they have access to. This is called âhigh-gradingâ. With the lack of new discoveries, most mines are âolder minesâ in which production grades have been plummeting over the years.
At the El Penon Mine, which weâve been coached to use as a template for the DL2 Mine operations, Meridian Gold (and then later Yamana) were mining gold with a âhead gradeâ of about 15-18 gpt gold, which is an incredibly high-grade of ore. Now their âhead gradeâ is closer to 4 to 5 gpt gold. The Meridian Gold shareholders made a fortune back during the âhigh-gradingâ years. Auryn has a fresh mine, the artisanal miners skimmed 2,000 tonnes of extremely high-grade ore off the top which only amounted to about 5% of the vein structure. Aurynâs project is a bit of a hybrid. It is partly the recommencement of mining activities at an extremely high-grade gold mine and it is partly a new discovery, especially when you factor in the other 5 Main Veins.
The historical grades are what they are. For 30 years, the artisanal miners averaged 64 gpt gold with no beneficiation from things like froth flotation or CIL plants. Their technology was so bad that their tailings piles/discards still contain 14 gpt gold. Should we add about 10 gpt gold to that 64 gpt total to predict what Auryn might average? Although the artisanal miners AVERAGED 64 gpt gold, where they ceased operations, they were averaging 74 gpt gold at level 2 of the âold worksâ. Should we be penciling in 74 gpt gold plus another 10 gpt gold from the lousy technology and expect 84 gpt gold? We wonât know until we have some longer-term production statistics but you still have to be true to the history.
HOW ABOUT THE FACT THAT AURYN IS PRODUCING âDIRECTLY FROM THE VEINâ?
What effect on estimated grades should this represent? In most underground vein operations, the miner is mining not only the relatively high-grade vein material itself, but they also are forced by necessity to mine some of the less well-mineralized âwall rockâ ore. This is referred to as âDILUTIONâ. Nowadays, manufacturers produce mining equipment that is much narrower and thus the miner can leave the less-well-mineralized ore lateral to the vein itself alone. This increases the âhead gradeâ of the mined ore.
Dick Sillitoe and Rob Cinits of ACA Howe both noted that the grades of the DL2 Vein were definitely improving with depth as were the widths of the vein. This is the hallmark of MESOTHERMAL VEINS that form way down deep in the earthâs crust. Should we add a âfudge factorâ for this effect as Auryn develops the various sub levels under the current level 3? We might want to think in terms of the average grade being mined over the first 3 or so years of production by Auryn. I canât guarantee any average grades over the first 3 years but I certainly canât turn my back on the historical and scientific facts. This is not a tired old mining project in which all of the good stuff is gone.
HOW ABOUT AVERAGE PRODUCTION RATES OVER THE FIRST 3 OR SO YEARS OF PRODUCTION?
Auryn is now mining from the 2 working faces present on level 3. Soon they will be mining from 4 working faces on levels 3 and 4. Then they will be mining from 6,8, and 10 working faces on levels 3 through 7. This high level of SCALABILITY was provided by SERNAGEOMINâS signing off on Aurynâs new ventilation/safety egress system.
CAN YOU VISUALIZE THE PATHWAY THAT AURYN APPEARS TO BE ON?
Theyâre mining extremely high-grade gold ore that is improving with depth. They have the ability to aggressively ramp up production levels over time. They are commencing extremely high-grade gold production at a time when the price of gold is at all-time highs. The potential is there to produce some extremely high levels of EARNINGS. Auryn only has 70 million shares outstanding. The potential for EXTREMELY HIGH EARNINGS PER SHARE are staring us in the face. Can there be any âguaranteesâ, of course not.
WITH ALL OF THIS AS A BACKDROP, WHAT HAS BEEN OCCURRING TO THE SHARE PRICES OF MEDINAH, WHICH OWNS 24% OF THE ENTIRE ADL MINNG DISTRICT?
Oh, not much, itâs only down 99%. Previous shareholders have been convinced to sell their shares and run for cover.
What is really weird is those that have no position here, have posted 50 times just this year, more than any other poster, apparently has nothing better to do. This same egocentric poster, NEVER misses an opportunity to criticize alternative opinions of what is possible, or even aspirational. You would think that those who have actual skin in the game would be allowed to post without this stalker-like behavior of constant harassment. That is what I consider really WEIRD! Seriously! 
You must be referring to accumulation of MDMN.