Auryn/Medinah 2025 1st half General Discussion

  1. Because they need a project manager. While I might suggest that RMN is anything but a “world renowned” player in the mining industry he clearly has enough experience to manage a project of this size. There’s no doubt that the filling of this position is a good sign/reflection of Maurizio’s confidence in eventually commissioning this project.

  2. Going from exploration holes to a resource to a feasability to production is going to take a whole lot more than 5 years but, you’ve got to start somewhere. Unless AUMC plans to spend the next decade suffering through the consequences of the last decade of going “rogue” (no resource, no interest) they will be forced to take these industry standard steps.

If they want to avoid another Hochschild fiasco they should plan on at least a few exploration/drilling campaigns to produce adequante results in attracting a larger partner with the resources to properly advance the resource.

The question becomes, how much free cash flow can they allocate to this drill program. Based on the size/scale of this project along with the long list of obligations (some we know $6-$8M and others we dont $20M+) its hard to know when that FCF will be available. The other option would be trying to issue shares (again) to finance the exploration. This could be more immeidate but hard to do at the current valuation (even post a year or two of small scale production).

Lots of moving parts and variables that make following this investment a lot more entertaining.

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Hey John, I have to ask why now? Where were you 10 years ago? You were a big cheerleader of both MDMN and CDCH looking for the big pay day just like all of us. You never mentioned all this then. Now the company is making big strides to get this over the goal line. Why now?

This highlights the major point of contention between BB and BE. John has been arguing all along that absent an industry standard feasibility study, this company will never be valuated anywhere close to what we think the property is worth. BB keeps arguing that the market will be forced to value AUMC equitably based on EPS and the non-industry standard analysis performed to date.

I challenge Doc to explain why the market should be convinced that AUMC will be able to sustain say a $20M+ annual net profit just because it accomplishes say its first full year of production? This puts the timeline out even further to prove that it can continue to do this year in and year out. We already endured a decade into this with AUMC at the helm. We could easily be looking at 15 years total by the time they prove consistent year over year net profits. Remember, the great trade off for not being diluted to raise funds for an industry standard drill program was that so we could reap the benefits once production began and the profits started flowing. So 15 years passes with no dilution but with no market value attained either. Our money has been put to sleep for 15 years. The dividends and or market value would need to soar exponentially in the next 5 years to honestly say that this strategy was worth it. They still have $6M to pay back to MC plus the $4M loan plus whatever the hell this $20M service agreement is all about. Also they need to get audited financials and off the OTCs if this is ever going to be valued anywhere close to being worth the 15 year wait.

We’re all hopeful and many of us optimistic that this will finally hit the jackpot. The POG is certainly helping the outlook. What needs to now happen in the next few years is huge profit numbers, year over year increase in production and profits, cash dividends, audited f/s, cash dividends. Thats alot to ask for in a few years. We need this company to be valued at $1B+ to make this worthwhile for most of us here.

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Three/four main points.

  1. I know 1000x more than I did a decade ago (more like 15 years ago). I fell into the same trap of believing the fantastical tales of imminent wealth and world class deposit upside b/c I didn’t know any better. I understood the markets but not the technical realities of mining. Over the past 10 years I’ve extensively invested in both private and public precious metals projects. Unlike some, I’ve been able to adapt my perspective on this opportunity based on knowledge acquired along the way.

  2. I’ve always appreciated the potential value of the assets and have never denied that there is some really exciting scenarios on how “the mountain” play outs. However, its imperative to make the distinction b/w the potential value of the mountain vs. the investment (AUMC/MDMN). Those that have not been able to do have clearly suffered the consequences.

  3. My enthusiasm, 15 years ago, was based on a digestable capital structure (before Les’ fraud) and the potential for a game changing acquisition of the assets (which also turned out to be fraudelent). AUMC basically absorbed the assets for a song and the ownership of “the mountain” diluted existing shareholder to next to nothing.

  4. I’d like to point out that when I say that the ASIC will be closer to $1400oz or that the average grades will be closer to 10-20gpt these are NOT negative comments. They only seem negative when contrasted with some of the unattainable (insane?) claims offered on this board. No mine averages 60gpt, its almost impossible to attain an ASIC under $1000oz in a super smale scale project, legitimate stream/royalty companies will NEVER lend to a company without a defined resource. These are just facts that anyone with real like mining/investment experience will confirm.

Maurizio is slowly making strides after a looong period of stagnancy and productiuon false starts. I commend his efforts in what has been a very challenging environment while taking some issue with the UTurn the company took (based on information available and referenced many years prior/read: Caren).

The problem becomes growing into a very rich valuation which will take a lot of time and patience. The handling of the AUMC share distribution and the delisting on MDMN are hard to defend. I admittedly take issue with the old guard who continue to post about imminent wealth creation, massive cash flows, dividends, and P/E multiples of 30 (with no defined mine life). If you don’t adapt to the realities on the field the seeds of disappointment will continue to grow. Its a tad bewildering to me that some folks have never changed their stripes despite being wrong (every time) over the course of this journey. Objectivity often escapes those who are in “too deep”. The majority of the folks around here are stuck in an investment (MDMN) which can only be sold for $0. It’s hard to remain objective when optimism is literally the only option.

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Hi JimmyP,

In regard to your comment:

“I challenge Doc to explain why the market should be convinced that AUMC will be able to sustain say a $20M+ annual net profit just because it accomplishes say its first full year of production?”

Let’s review the history of the average junior explorer/developer that was fortunate enough to make it all of the way into production and earn, let’s use your $20 million figure, a net profit for year #1. It is very, very, very common for a new producer to aggressively ramp up its “production profile” over time. Production “bottlenecks” will no doubt appear, and they will be quickly diagnosed and addressed by the “RMN’s” and “Stracoms” of the world.

Let’s start with where Auryn is at developmentally as we speak. On Day 1 of the commissioning of the FF plant, they will have a 20,000 tonne stockpile of ore sitting next to the FF plant. This ore came right out of the extremely high-grade DL2 Vein. Auryn’s crew will have already “sorted” the ore and discarded any rocks that are visibly unmineralized. Unlike a huge percentage of early producers, Auryn was able to “MINE DIRECTLY FROM THE VEIN WITH MINIMAL DILUTION FROM THE SURROUNDING WALL ROCK” for at least 270 days while stockpiling this ore. They did this with “percussion hammers” which are also known as “jack-leg drills”. When you’re “breaking in” an ore processing facility like a froth flotation plant with a 20,000 tonne stockpile of ore sitting next to it, the geoscientists and metallurgists will start feeding in ore at a certain pace.

The preliminary “bench top” FF studies done in the lab (some at the University of San Sebastian some elsewhere) will tell the metallurgists what reagents worked the best in recovering the sought after metals i.e. gold, copper, and silver. Usually its ethyl xanthate. They will run experiments “tweaking” things like the temperature and density of the solution made up of water and finely crushed ore (the “pulp”) as well as the concentration of the ethyl xanthate that results in the highest recovery rate. They’ll do the same with the “Ph” (acid/base measurement) of the solution and find the Ph that results in the maximum recovery rate. They’ll study the “agitation rate” that results in the maximum recovery rate. They’ll experiment with the bubble diameter that results in maximum recovery. They’ll experiment with the “retention time” (usually 8 to 12 minutes) in the “cell” that results in maximum recovery. They will determine an optimal “feed rate” for feeding the crushed ore into the “rougher”. They will also determine the optimal “particle size” for the ore. This will let them tweak the ball mill and grinding circuit to result in the best “particle size” (often around 75 microns). All of this data will result in an “optimal flow sheet”. Thankfully, Auryn has an on-site assay lab that will GREATLY STREAMLINE all of this testing (as well as all future exploration work).

Once fully “dialed in” then off you go. Recall Dr. Helmut Mischo’s comment from a quarterly update citing on how once the “dialing in” process is completed, then the ramping up of the production rate will be very predictable. The process is very much “customized” to the ore that is being processed.

Auryn was extremely wise in having 20,000 tonnes ready to go on Day 1. The continued production from the adits will be ongoing as that initial stockpile is processed. I’m going to guess that it will take about 10 months to process that initial 20-thousand tonne stockpile. Try to picture 1,000 of Auryn’s blue 20-tonne trucks filled and ready to be processed on Day 1.When that stockpile has been processed, there will be a second stockpile sitting next to the FF plant from the day-to-day mining done from the various adits that Auryn is using to source ore from.

As more and more adits from the 8 Main veins are being used to source ore from, each adding 1,000 tonnes per month as per the new Chilean “Small Producers Statute”, the initial “throughput” of 100 tonnes per day will be exceeded and more “cells” or “banks of cells” will be added in an incremental fashion. Recall a recent quarterly update that cited that Auryn “commissioned the fabrication of additional units” after placing the initial order for the FF plant with a 100 tpd rated “throughput”. I’m going to guess that this will arrive after Day 1 for the commissioning of the FF plant. So, the initial increase to the 100 tpd “throughput” is already “baked into the cake”. If you read between the lines, management must have been confident that the miners working in the adits will be able to source enough ore to keep the plant busy. NOTE: A 100 TPD “THROUGHPUT” FOR AN FF PLANT IS INCREDIBLY SMALL BY MINING STANDARDS. So, don’t expect it to stay at this level for very long with the price of gold where it is. But why pay huge bucks up front for a gigantic plant when you can incrementally add new “cells” as needed? The design engineers will have appropriated plenty of space for incremental “add-ons”. There is a manufacturer of “cells” not too far away from the base of the North Road that accesses the ADL plateau.

The ability to rapidly ramp up the “production profile” is the NORM in this industry after the ore processing plant is “dialed in”. Once into production and the cash is flowing, all of a sudden everybody on the planet is your best friend. Doors that were previously closed are now wide open. The IMPLIED RISK for a financier to aid a company like Auryn in ramping up its production profile is de minimis compared to the RISK for a financier to, let’s say, lend money for a diamond drill program. It would not surprise me if the current financier were to offer to make it easy for Auryn to ramp up production EXTEMELY AGGRESSIVELY with the price of gold trading where it is and because of the fact that an “AFFILIATE” of theirs is running the mine. The ambient price of gold will help dictate the slope of the “production profile” graph. I would predict a RACE to get as many adits into production as soon as possible. Although the maximum production rate PER ADIT is 1,000 tonnes per month, the streamlining of permitting under this new statute is ideal for a company like Auryn with 8 Main Veins to choose from.

Jimmy P, I’d try to picture a graph of production levels as a function of time with a robust increase early on that is destined to plateau out after many years. Now picture a graph of production levels over time as increased mechanization is deployed, especially in the form of “jumbo drill rigs”. Then picture a graph of the average AISC as a function of time as the production levels increase over time. Then superimpose those 2 graphs and visualize a graph of Annual Net Income as a function of time as the production levels go up at the same time that the AISC drops.

The deployment of the first “jumbo drill rig” will probably result in a temporary parabolic move in production. If enhanced mechanization is related to free cash flow it will occur at a certain pace. If it comes from willing financiers that are OK with extending the terms of the original financing i.e. “SOFR plus 4%” paid over 5 years, then the curve will go parabolic much earlier on.

In regard to “mechanization” related to things like a froth flotation plant or to “jumbo drill rigs”, an FF plant only costs about $10 per tonne processed. They pay for themselves in a heartbeat. The same goes for “jumbos”. Until the cash starts flowing, the typical junior “producer” can’t afford any of this stuff. The technical innovations now available in mining are insanely productive. In the mining sector, this is where those “5 and 10-baggers" we read about come from. Think back to the artisanal miners at the DL2 Vein. With picks and shovels they were averaging 64 gpt grades when the price of gold was $35 per ounce.

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Thanks Doc for the response. This needs to get up to $1B market valuation in order for this to be worthwhile for the majority of MDMN stuckholders. The market needs to be able to verify the likelihood of 30± years of $50M+ net profits to sniff that evaluation. BE’s point is that can’t happen without an industry standard feasibility study.

Are you banking on large enough dividends in the next 1-5 years that will get us there?

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Jimmy. I’d suggest you keep your investment aspirations somewhere in the realms of the ballpark let alone stratosphere. If you browse through the public companies trading with $1B market cap you will quickly appreciate that this is not a reasonable target within the next 5 years (even if everything goes right, which never happens).

The PE ratios referenced on this board isn’t the best way to try to value the company. Partly because, as you have noted, its impossible to place a forward multiple on any investment unless there is visibility for forward production. By way of example, a gold producer with a 10 year mine like won’t trade with a PE of over 10 b/c of the finite visibility. The market may make exceptions if it assigns a high probability that the resource/mineralization can expand with further drilling. Unfortunately for AUMC, there isn’t a defined resource from which to build upon. If the company is able to allocate FCF to a legitimate exploration campaign, the market will start to assign value to those resources, on a discounted basis.

Related to discounts, the proper way to attempt to value AUMC would be calculating a NPV (Net Present Value). This calculates the current value of a future stream of payments. While its nearly impossible to estimate the timing and amount of future cash flows (for AUMC), it’s worth a try. I would suggest that the discount rate used (equal to the minimum acceptable rate of return) should be at least 20% given the risk profile.

You can find NPV calculators all over the internet and just plug in your assumptions.

When looking at the precious metals sector, public companies usually trade at a discount to the NPV but it varies.

If you calculate a 5 year NPV with FCF of $10M year one, $15M year 2, $20M year 3, $30M year 4, $40M year 5, the NPV is $56M. This would be using a 20% discount rate. If you drop the discount rate to 10% the NPV is closer to $70M. In other words, if you think the FCF inputs I (randomly) used are in the ballpark of being accurate (I believe they are way too high) than the current market cap of AUMC is reflecting that outcome. If the Co’s FCF ends up being lower, AUMC is too expensive, FCF beats those expectations, AUMC is too cheap. Either way, if you are looking for AUMC to double in price from current levels ( to $1.20- $1.50) that FCF will need to greatly exceed the inputs I used and the capacity of the mill will need to be at least 5-7x larger (750tpd+)

The obvious counter point to the above analysis would be: if AUMC is generating $40M in FCF in 5 years it will be trading with a market cap well above $100M in 5 years (especially if the market is comfortable that the mine life is long enough). However, NPV is very helpful when trying to assess what a company is worth today. I don’t know anybody using PE multiples to determine the same.

FWIW

Separately, this theory of massive dividends feels like a legacy concept. In all of my conversations with Maurizio he’s consistently relayed a message of GROWTH. This growth will be fed by FCFs coming from this initial, small scale operation allocated towards exploration. Given the liabilities that need to be covered before there is actual FCF I can’t speculate on the timing of exploration campaigns, or external capital that could accomplish the same, but I DONT understand where dividends fit into the equation. Nor do I blame Maurizio for targeting exploration expansion. This goes back to a universally shared “gut feeling” of the mountain’s potential. The only way you uncover this potential is through re-investing profits back into the mountain or to expand capacity of the mill or to increase the mechanization of the mining. AUMC could theoretically keep tapping debt financing (if its available) but that is a very dicey game. Not to mention, there is ZERO chance that the current debt financiers would allow dividends until the debt is being amortized. This is intercreditor agreement 101 type stuff.

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My point was that it needs to get to that valuation if this was ever going to be worthwhile for MDMN stuchholders. Anything short of that will equate to anywhere from still a loss to a healthy profit (depending on ones average cost basis), but nothing earth shattering after 15+ years in the investment. For many its well over 20 and 25+ years.

The point was to further this debate along whereby BB is comfortable that the market will be using PE multipliers and 30 year NPV calculations where as you are using 5 years max (see above) and throwing PE multipliers in the toilet.

Im challenging BB to explain why the market is going to so easily see what he claims is so easy to see which is that there is multiple decades worth of mineralization that is only increasing in grade at depth. This secret information is not readily available or digetable to the market. Will it be? Is it even able to be?

The market doesn’t assign value to what could be. It values companies on what IS and the prospects of what MAY BE. Nobody is going to model out assumptions based on the results of artisenal miners and grab samples. Another option would be to allocate a portion of the FCF to drill out the property. This would allow the market to better crystallize a resource/valuation and, of equal importance, an actual mine plan. Again, there is a reason why 99.9% of miners go the “traditional” route and suffer through the dilution. The only alternative is the current “gold rush” model where AUMC will hopefully generate so much FCF that they can buy back all of the outstanding shares if the shares don’t appreciate in value.

Candidly, AUMC is way better suited to exist as a private company where none of this stuff really matters if they are confident in existing as a “going concern” without the headaches of public market parameters. I’m sure the guys chasing the vein would appreciate a mine plan (compass) but that doesn’t have anything to do with the valuation discussion.

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IMO, BB has given us a lot of info overall, especially with his intense knowledge of mining. He’s provided an in-depth look at the inner workings to better visualize the reasoning behind Auryn’s decisions. Of course it’s not his job to have all the answers, and he doesn’t claim to either. He always admits when he’s sharing his opinion or guesstimating the possibilities ahead, but he usually has a lot of factual data that may support his opinions. Many of us want to hear about it, those who don’t can just ignore it. Also, we’ve recently heard from Wizard, EZ, CHG, Mike Gold and others who are kind enought to objectively share info from their acquired knowledge & experiences.

I believe Auryn has advantages over other junior miners, as noted on this board many times. One unique advantage is MC’s bootstrapping Auryn’s progress without need of a JV at this point, he holds the reigns. Several faces ready for the FF plant processing. Only 70M non-diluted shares, and assays or minerology reports from separate labs. Those reports were pivotal for AUMC’s strategies for processing the stockpiled ore, for starters. Auryn has core samples and mining experts who contribute to Auryn’s success.

Combine all that with factual portions of Shareholder Updates (albeit not as much info as we want). I just find it hard to imagine, after waiting all these years of slow progress, that anyone still doubts Auryn’s imminent success while we’re finally on the edge of production. Although there are a few unknowns yet to be explained, I am confident about success with our MDMN shares as they rely on the the continued progress of AUMC.

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Hey Jimmy, look at that gold almost at $3300. That feed pile is worth some serious money!

Timing couldn’t be better :grin:. We need to start seeing this company hit its targets now!

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No turning back! These guys need to deliver! Gold is having its best day ever. Up 113 for the day to 3343

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I think they’re just as motivated as the rest of us.

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Hi Jimmy P,

In regard to your comment: “I’m challenging BB to explain why the market is going to so easily see what he claims is so easy to see which is that there is multiple decades worth of mineralization that is only increasing in grade at depth.”

I saw an interview of Eric Sprott a while back where he commented on how disappointed he was in the investors in mining stocks that are developing underground vein deposits, not being able to ROUGHLY estimate things like “contained ounces” and “mine lives”.

His suggestion was to simply take the “strike length” of the vein at surface and multiply it by the known depth. If you think of a vein as a “planar” buried “sheet of plywood”, this will give you the square meterage of the sheet of plywood. Then if you multiply that figure by the perceived average width of the vein, lets say, 0.75-meters, you’ll get the “volume” of the vein in cubic meters. Then you need to multiply that “volume” by the “specific gravity” or density of the rock material (approximately 2.75 tonnes per cubic meter for the “granodiorite” at the ADL Mining District), then you’ll get the approximate “tonnage” of the ore contained within that vein/”sheet of plywood”.

For Auryn’s DL2 Vein, the vein has a “strike length” at surface of about 1,000-meters. It has a known depth of 700-meters. Let’s set the average width at 0.75-meters for now. This means that the “volume” of the ore contained in the vein is approximately 525,000 cubic meters. With an “SG” of 2.75 for granodiorite, this translates into 1.44 million tonnes of ore contained within just the DL2 Vein.

To get the approximate number of “contained ounces” of gold within the vein, you need to multiply that 1.44 million tonnes figure by the average grade in “grams per tonne” or “ounces per tonne”. If you set the average grade at one-half ounce per tonne, which is 15.5 grams per tonne, then the number of “contained ounces” of gold in the vein is about 720,000 ounces in just the DL2 Vein.

There are 8 Main Veins at the ADL Mining District. The Merlin 1 Vein, which we know a fair amount about, has a known strike length of 1.9 Km which is about twice that of the DL2 Vein There are 2 veins at the ADL with average widths of over 2-meters even at surface. During the drifting of the Antonino Adit, prior to finally intersecting the DL2 Vein, which was the target, Auryn’s geoscientists ran into 24 new “structures, veins, faults”.

At the end of the day, the number of “contained ounces” held within the Pegaso Nero copper-moly porphyry prospect and the LDM gold-copper stratabound copper prospect, are probably going to dwarf that of the 8 Main Veins combined, but they need a lot of work to be done to confirm this. For me, “mine life” is not an issue whatsoever. Keep in mind that “mine life” is really “economic mine life”. At a $3,300 per ounce price of gold, the amount of rock in that mining district that is “economic” is very impressive.

When you’re mining 8 Main Veins simultaneously at some point down the road, you’re going to hit some “ore shoots”. These are areas within a vein that have extremely high concentrations of sought after metals like gold, silver and copper. The conditions within “ore shoots”, like the ambient pressures and temperatures present during formation of the vein, the chemistry of the hydrothermal mineralizing fluids, the chemistry of the surrounding rock, the salinity, etc., were ideal for the laying down of hyper-concentrated metals. When you hit an “ore shoot” you simply track it down wherever it goes.

A SIMPLISTIC “BACK OF THE NAPKIN” ESTIMATE FOR POTENTIAL EARNINGS DURING AURYN’S FIRST YEAR OF OPERATIONS

Knowing that Auryn is on track to have 20,000 tonnes of ore stockpiled and ready to go on Day 1 for the commissioning of the new froth flotation plant allows us to make some prognostications. The “daily throughput” of the original FF plant was 100 tonnes per day. Then Auryn cited that they were “commissioning the fabrication of other individual units”. These would be FF “cells” or “banks of cells”. They never indicated the “throughput” of these “individual units” so we don’t know what the actual “daily throughput” might end up being.

When you “dial in” a new FF plant, you’re not going to average the rated “daily throughput” right from the get-go. I’m going to guess that it will take several months to reach “rated throughput” and end up taking about 10 months to process that initial 20,000 tonne stockpile. Note that the mining of the ore will continue after Day 1, on or about July 1 of 2025, and there will be a new stockpile of ore ready to go after the initial 10-month period and the initial 20,000 tonne stockpile is exhausted.

If the average grade of the stockpiled ore is somewhere around 15.5 gpt “gold equivalent” or one-half ounce per tonne, there would be about 10,000 ounces of gold in a 20,000 tonne stockpile (20,000 tonnes times one-half ounce per tonne). FF plants are very good nowadays, but they still don’t feature 100% “recovery rates”. Let’s set the average “recovery rate” at 80%, which is a fairly standard rate of recovery for an FF plant. This means that they might only “recover” 8,000 ounces of gold, contained in what is known as a “float concentrate”, in that first 10-month period. If we “annualize” the production in that first 10-month period to 12 months, then we might expect about 9,600 gold ounces recovered in Year #1. That is a miniscule number in comparative terms for mining operations BUT IF YOU CONVERT THAT NUMBER INTO “THE NUMBER OF GOLD OUNCES PRODUCED PER MILLION SHAREs OUTSTANDING” YOU’RE GOING TO TURN SOME HEADS. The math is 9,600 ounces divided by 70 (million shares outstanding) equals 137 ounces per million shares outstanding.

The equivalent would be a mid-tier miner with 1 billion shares outstanding i.e. 1,000 “million”, producing 137,000 ounces annually. Investors own these things called “shares” of the invested in corporation. The important metric is how many gold ounces does each “share” of ownership produce. I’ve said this many times before, the “crown jewel” of Auryn is doing everything they’ve accomplished WITH ONLY 70 MILLION SHARES OUTSTANDING. The most important metric for any corporation is “EARNINGS PER SHARE”.

I have been modeling the ALL IN SUSTAINING COST (AISC) for quite some time and I’m estimating it to be right around $800 per tonne. This includes “Off-site ore process and refining” which some other party will likely be doing. Based on an average price of gold of $3,000 per ounce (today it is about $3,300), Auryn should be able to clear about $2,200 in operational profits per ounce produced. This would suggest operational profits of somewhere around $21.1 million for Year #1 UNDER THE ASSUMPTIONS OUTLINED WHICH NEEDED TO BE WRITTEN “IN PENCIL” FOR NOW, UNTIL WE GET CONFIRMATION FROM AURYN MANAGEMENT.

NOTE: When you study the text of the quarterly updates made over the last several years, you’ll note that a significant percentage of the ore in that 20,000 tonne stockpile of ore was mined “DIRECTLY FROM THE VEIN WITH MINIMAL DILUTION FROM THE SURROUNDING WALL ROCK”. This type of mining is done with “percussion hammers” or “jack-leg” drills without blasting. It is more of a “surgical” method of removing ore while leaving the sterile “wall rock” on the walls of the adit.

The question becomes what kind of “GRADE EXPECTATIONS” should we have for ore mined from the DL2 Vein in this fashion. The DL2 Vein was mined for at least 270-days in this fashion and that should represent a significant portion of the stockpiled ore. In their 10/30/24 quarterly update, under the paragraph heading of “LABORATORY TESTING AND GRADE EXPECTATIONS”, management cited how they had sent a 2,200 pound “experimental batch” of ore to the Enami smelting facility. This ore was mined in this same “DIRECTLY FROM THE VEIN WITH MINIMAL DILUTION FROM THE SURROUNDING WALL ROCK” fashion. The results came back at 57 gpt gold,978 gpt silver, and 3.23% copper. When you do the math, this comes out to 70 gpt “gold equivalent” which is a heck of a lot more than the 15.5 gpt I penciled in. This is what management had to say about this particular 2,200 pound sample: ”This sample represents vein ore with minimal dilution, PROVIDING A SOLID BASELINE FOR GRADE EXPECTATIONS.”

OK, so 70 gpt “gold equivalent” “SHOULD PROVIDE A SOLID BASELINE FOR GRADE EXPECTATIONS”. But there’s a caveat attached. This only applies for ore mined “DIRECTLY FROM THE VEIN…”. You should know, however, that in the very next line of that very same update, Auryn cautioned investors to expect grades of “AT LEAST 10 GPT GOLD” in the normal course of mining i.e. from a variety of veins being mined under a variety of conditions. Unfortunately, we don’t know the exact percentage of the 20,000 tonnes of stockpiled ore that was mined in which fashion, “DIRECTLY” or via blasting.

Veins tend to dilate and constrict as they work their way through the surrounding host rock. In areas where the vein has constricted, the miners almost have to use blasting which will release both the high-grade vein ore as well as some of the surrounding, somewhat sterile, surrounding wall rock. Don’t expect 70 gpt “gold equivalent” grades under these conditions. During that 270-day period of mining “DIRECTLY FROM THE VEIN…”, they must have been in a relatively dilated section of the vein.

The worldwide average grade being mined in similar underground “narrow vein” operations is 4.18 gpt gold AND DECREASING BY 6% PER YEAR. The average grade being mined in “open pit” operations is about 1 gpt gold, so, expecting “AT LEAST 10 GPT GOLD” is quite an accomplishment, in and of itself. Note that the “SAMPLE SIZE” of the ore shipped to Enami for testing in their smelter i.e. 2,200 pounds or 1 metric tonne, is a significant “SAMPLE SIZE” which provides statistical validity.

It should not be forgotten that a 264-pound sample of DL2 Vein ore, also mined “DIRECTLY FROM THE VEIN…” that was shipped to the smelter testing facilities of the Plenge Lab in Lima, Peru came back at 128 gpt gold JUST FOR THE GOLD CONTENT OF THIS ORE i.e. not including the “by product” contributions from the silver and the copper which were extremely “economic”. This ore was sourced from the same area as was the 2,200 pound-sample that was sent to the Enami smelter. The Plenge Lab smelter test came back at 2.2-times the gold grade that Enami came up with, which is why Auryn opted to bypass Enami and do their own on-site ore processing via froth flotation.

After successfully intersecting the DL2 Vein via the Antonino Adit, Auryn’s original “channel sampling” of the DL2 Vein via 4 separate groupings of samples, came back at an off the chart 164 gpt “gold equivalent”. A second round of “channel sampling” was then completed which came back at 150 gpt “gold equivalent”. These figures are much more in line with the Plenge Lab results than the Enami smelter results. It’s confusing, but I guess the bottom line here is not to be surprised if the production results SURPRISE TO THE UPSIDE. We’ll know soon enough.

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“We’ll know soon enough.” Seriously, bro??? I’ve heard the same stuff spewing from you for over 20 years now, “soon enough” left the building a decade ago… SMH

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While disappointing, this is how the market works. People don’t invest in companies with rough estimates on resources. They can speculate on exploration upside but there needs to be a “foundational” resource from which to build. Most folks don’t have the technical expertise of an Eric Sprott to accurately estimate mineralaztion by simply multiplying strike length by depth by grade. Even Sprott would admit that this highly crude form of analysis inevitably leads to a massive delta of outcomes. This is why the market does not assign value to the same.

This being said, there are many dozens of million ounce + (actual) resources that aren’t getting much credit by the market either. At some point investor flows will trickle down to the junior space but it hasn’t happened as of yet (lots of these company’s shares are trading near historical lows). The Newmont’s of the world have started to benefit (but still trade significantly lower than ATH), the mid-tier names are also doing well (Artemis, Wesdome) but many of the little guys are stagnant. Maybe the “rough estimate” resources will even start to benefit if gold stays at this levels long enough but there is a pecking order (and a long way to go).

I remember getting a lot of “heat” (criticism, insults, accusations) for even suggesting that this project would, hopefully, generate 10gpt average grades. Maurizio confirmed it and now even folks on this board have embraced this “down to Earth” reality. Its refreshing and ultimately a positive for the share price as investor sentiment becomes more rounded. IMHO

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Stockpile (with decent grade), new plant, other veins, other metals deposits, additional ‘experts’, All Good.

Trucking for many 100’s of km to ENAMI, current payments (labour, equipment, assays, BOD, Ameco Chile SpA, etc.) , debt repayment, MDMN repaying debt & pmts for up to date financials & OTC requirements to restart trading, …NO DRILLING TO VERIFY THE BLUE SKY VALUATIONS of the deposits to progress to 43.-101 standard = NOT GOOD

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Seems that many of you are in the wrong stock or are waiting for certain things to happen based on what you all think AUMC should be doing. It is crystal clear that MC is taking a path less travelled that you all are not comfortable with. Your persistent rinse and repeat lecturing (good or bad) on what should be done is tiresome. I would suggest that you either accept the path and wait for the outcome (good or bad) or move on.

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Good info, BB, as usual. The gpt stats of ore taken directly from DL2’s vein are impressive any way you dice it. Yet we know the gpt stats from overall production won’t be consistent with those numbers.

Still, I would take bets that some TMP members will soon be very surprised to the upside. Especially those who don’t seem to be aware of the data supporting Auryn’s progress to near-term production.

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