Third quarter about to commence, looking for progress.
Continuing the discussion from Auryn/Medinah 2025 1st half General Discussion:
Typical timeline:
Thanks BB. Very informative posts.
EZ
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Good thing there were some July fireworks here in the USA on the 4th.
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Mdmn has had AUMC shares in its possession since 2018!!!
That’s 7 years gone by now that us mdmn shareholders have not received them
WTF
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The thing is, Maurizio owns over 60% of the MDMN shares. I think if he was going to do something that would basically screw us, it would have already happened. I too would like to have my shares but I trust that he is a very savvy ombré and he is waiting for the right time that will benefit him the most, hence benefit us also. I’ve been in this since 07, so I’ve resigned to waiting to see what happens when it happens.
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Correct, since he is 100% aligned with us, by definition if he screws us he screws himself. All this talk about us never getting our shares is nonsense.
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I have 1.5M shares of MDMN and some CDCH-converted AUMC; this since about 2007 - 18 years!!! All I want to see now is that this fiasco ends somehow. It would be nice to make some money, but by now, at least in my aged mind, it is a write-off.
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That quarterly update must be sooo juicy that they just can’t find the right day to release it.
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No matter how juicy it is or will be if they don’t promote nothing will happen. It will be just us again reading the update from their website , a few hundred shareholders if that many. Some have passed away some have sold and some skeletons are left behind.
My wife has called me worse…
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“My wife has called me worse…”
Well, that means that your wife is at least talking to you!
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Either:
(1) There is nothing to report, or
(2) They’re so busy they haven’t found time to report.
My bet is Door #2, but you can make your own choice - we’ll all have to live with our own choices.
Do you really think MC is looking to screw the shareholders of a company of which he owns 60%? Me either.
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Possibility (1) is highly unlikely.
Possibility (2) is realistic, but I’d like to propose another possibility. Yes, they’re very busy. The news releases, PRs & updates (they may be composing) cover a lot of ground.
Possibility (3) They are dotting all the i’s and crossing all the t’s right this very now.
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QUESTIONS I would like to ask:
(1) We know that each adit is limited to 1,000 tonnes per MONTH to stay under the Chile Small Miner Statute. The company has said we should expect production to begin in the Antonini adit this quarter - and that they were also aiming to do the same with two more adits over at the Merlin IV vein (N and S). So, that would be three adits. I think I’ve also read that each mesothermal vein could have between ten and twenty levels to mine from. Would each of those levels generate a new adit? Or, does each mesothermal vein (and we have about eight total of them) have just one adit? One reason I ask is the El Penon mine up north is producing at a throughput rate of 3,600 tons per DAY - that’s a lot. And I wonder if they are using a blasting or jack-hammers.
(El Peñon - Pan American Silver)
(2) What is the highest potential throughput on the FF plant equipment we have? I think the goal was to make it quickly expandable?
Does anybody know? Or, is this information that we can’t even guess at quite yet?
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Hi MrB,
I see that there are no takers on your questions, so I’ll give it a shot.
Question #2 first. The “nameplate daily throughput” for the FF plant originally ordered by Auryn was 100 tpd. This means that after the raw ore is crushed by the gyratory crusher and run through the ball mill, you could feed 100 tonnes per day of the resultant “sand” into the FF plant, and it would process it. Note that this is a super-tiny “daily throughput” in comparison to most. Run the numbers though and see what kind of EARNINGS PER SHARE a super-tiny plant like this can generate (when the company has extremely high-grade gold, copper, and silver and only has 70 million shares O/S) before the ramp-up process even commences.
On a somewhat recent update, Auryn stated that they subsequently “commissioned the fabrication of other individual units”. By “units” I assume they mean new cylindrical “cells”, “columns”, or perhaps “banks of cells”, over and above the number within the originally ordered FF plant. We weren’t given a number for the addition throughput to add to the original “nameplate daily throughput” of 100 tpd. In between the original order and the second order, I assume that Auryn calculated that their miners in the adits could keep up with a higher throughput capacity. This may have to do with Auryn’s recent announcing of their new “SUB-LEVEL STOPING PROGRAM”.
For me, the key is to focus in on the 20,000 tonnes of stockpiled ore ready to go on Day 1 of the commissioning of the FF plant. This represents 200-days-worth of ore “feed” based on a 100 tpd daily throughput but keep in mind that during the “dialing-in” process the plant won’t be running at full capacity. I’m penciling in about 300-days (10 months) to process that initial 20,000 tonnes of stockpiled ore. If you’re going to model potential earnings for the first year, don’t forget to multiply that 10-month figure by 1.2.
What’s key is that a certain percentage of this stockpiled ore was mined “WITH MINIMAL DILUTION BY PERCUSSION HAMMERS” instead of the normal blasting and mucking. This means that it will be of a higher grade than ore extracted via blasting. Auryn mined in this fashion for at least 270 days based on their quarterly updates that kept stating that they are continuing to mine in this “MINIMAL DILUTION” fashion and that things were going well. The production rate was not given other than it was described as being “modest”. When Auryn revealed that 20,000 tonne figure for the stockpiled ore on Day 1, I was pleasantly surprised.
The new Chilean “SMALL MINING PRODUCERS STATUTE” became effective on 1/1/24. Chilean Law No. 21,420 was passed on 2/4/22 and then modified in December of 2023. It replaced Law No. 2,568 from 1979 (thank goodness). It states that if a miner voluntarily restricts itself to producing 1,000 tonnes per month per adit, then your tax rate will be lessened and more importantly YOUR PERMITTING PROCESS WILL BE GREATLY STREAMLINED ESPECIALLY IN REGARD TO POTENTIAL ENVIRONMENTAL ISSUES. It’s the delays in permitting that you want to avoid. Recall, however, that when the permitting authorities last visited the DL2 Mine, they had nothing but accolades aimed at Auryn, and they even invited Auryn and their staff to give “workshops” to other members of the mining community on how to do things like ESG correctly and technological improvements that are now available. I don’t foresee any hassles with the permitting authorities. Maurizio is about as “by the book” as they come.
You can see the logic that if you’re restricted to 1,000 tonnes per month per adit, you want to make sure that as little of that tonnage as possible consists of less well-mineralized wall rock. This is where percussion hammers/”jack-legs” are preferred. You want to “surgically” remove the ore from the “vein proper” if possible. “Blasting” is not very discriminatory and the grade of the ore in the vein proper will be “diluted” because of sterile wall rock being mined. Expect the grades of the stockpiled ore mined “WITH MINIMAL DILUTION” to exceed the average expected grade of “AT LEAST 10 GPT GOLD” for blasted ore cited on the recent update dated 10/30/24.
ONE OF AURYN’S MOST REVEALING STATEMENTS MADE TO DATE
In that same 10/30/24 update under the heading of the paragraph entitled “Laboratory Testing and Grade Expectations” Auryn stated:
“AURYN recently submitted an experimental batch from the DL2 Vein to Enami’s smelting facilities, which returned promising results, showing 57 grams per tonne (gpt) of gold, 978 gpt of silver, and 3.23% copper (NOTE: 70 gpt “gold equivalent”) in a one-tonne sample. This sample represents vein ore with minimal dilution, PROVIDING A SOLID BASELINE FOR GRADE EXPECTATIONS (emphasis added). While mining grades may vary due to natural dilution factors, we anticipate achieving a plant head grade of at least 10 gpt on average as we advance the project. AURYN is committed to advancing mine development across the entire project area, …”
So, in regard to “GRADE EXPECTATIONS”, we now, for the first time ever, have a “SOLID BASELINE FOR GRADE EXPECTATIONS” of the ore within the DL2 Vein proper. We can expect the grades in the vein proper to run at around 70 gpt “gold equivalent” but, but, but, this only applies if the ore is removed somewhat “surgically” via percussion hammers. If blasting is involved, then management suggested the need to modify our grade expectations down to “at least 10 gpt gold”. The question that arises, in regard to the 20,000 tonnes of stockpiled ore, is what percentage of that was mined with percussion hammers and what percentage via blasting. The earnings for Year #1 will depend on that percentage.
For benchmarking purposes, don’t lose sight of the fact that the average grade of ore mined in similar underground “narrow vein” operations worldwide is 4.18 gpt gold. Mining “at least 10 gpt gold ore” is a phenomenal accomplishment especially when the 3 metals being mined are ALL trading at or near all-time highs. Note that the “sample size” of the ore sent to the Enami smelter was 2,200 pounds, which is a respectable sample size for a smelter test.
Regarding Question #1:
At El Penon, they’re using jumbo drill rigs and blasting. The grade they’re currently mining is about 4 gpt gold. They’re currently making a fortune on this mine while mining 4 gpt gold. One of Auryn’s geoscientists, Dr. Helmut Mischo from Germany, cited that once Auryn got their FF plant “dialed-in”, the ramping up of production levels will be “very straight forward”. This is the norm. It involves diagnosing any “bottlenecks” and then addressing them.
The new Chilean “SMALL MINING PRODUCERS STATUTE” addressed the critique that the Chilean mining community had against the Chilean mining authorities. That being that the permitting process was too fragmented. Historically different branches of the government were involved, and they didn’t communicate much with each other.
The new statute is basically trying to attract new junior explorers/developers to Chile by essentially “bribing” them with lower taxes and streamlined permitting. As I understand it, most juniors that do make it into production will take advantage of the streamlined permitting and lower tax rates TEMPORARILY. As I understand it, you can blow right through the 1,000 TPM limitations but your tax rates will be adjusted upwards. The key could be to maximize the number of adits you’re mining at the 1,000 tonnes per month PER ADIT allowance. SUB LEVEL STOPING might be the right approach because there are a lot of adits involved.
The Chilean government obviously wants junior producers to grow and become mid-tier producers while hiring more and more Chilean citizens. The government also wants the increased tax income associated with the juniors blowing through that 1,000 TPM threshold. The Chilean mining authorities have been promising for decades to streamline their permitting processes, and it appears they finally made some progress. Almost all countries that host mining activities are criticized for slow permitting processes.
As far as the number of adits involved, in “SUB-LEVEL STOPING” operations like the one Auryn is undertaking, 2 adits, separated vertically by about 25-meters or so, are drifted and mined from their inception to their terminus in the standard fashion. This leaves you with 2 empty “stopes” and a bunch of money in the bank. Then you start at the terminus of each empty stope, and work backwards while drilling and blasting the vein material in the floor of the upper adit and in the “ceiling/”back” of the lower adit.
The blasted ore becomes a gravel-like mix and it falls into the lower adit by gravity, where it is “mucked”/scooped and delivered to the surface. This “SUB-LEVEL STOPING” approach is for “large, steeply dipping” ore bodies like Auryn’s veins are. This is “big boy” mining with large production rates because you’re simultaneously mining from different “pairs” of different levels/adits which lines up nicely with the new statute.
The “mine lives” of these types of operations are obviously significant. The DL2 Vein has a known “strike length” at surface of 1,000-meters. Its MINIMUM depth is 700-meters. You can be simultaneously mining from a whole bunch of different “subparallel” adits when adits are separated by around 25-meters. The nearby “Merlin 1 Vein” has a surface strike length of 1.9 Km (1,900-meters).
Recall how the headmaster of San Sebastian University that Auryn works with, Senor de la Tierro (spelling?) who used to be the Head of Underground Operations for Yamana Gold at the El Penon Mine (before they sold it to Pan Am Silver), predicted that Auryn’s DL2 Mine is going to have many of the characteristics of the EL Penon Mine.
At El Penon there are also about 7 Main Veins within the same “Vein Set”. This Professor of Mining Engineering is intimately familiar with BOTH the El Penon Mine and the DL2 Mine. The recent Press Release citing that Auryn just hired a SUB LEVEL STOPING specialist, plus Ashmore/Stracon, plus Robert Mayne-Nichols, suggests that Sr. de la Tierro knows of what he speaks.
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Thanks, BB, always helpful and great recollection of the FACTS!
I wouldn’t worry that it is mid July and the 2nd quarter update has not been released. Remember, (OTC: AUMC) is committed to keeping our shareholders informed with the most current updates on our progress and strategic initiatives
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Very good!
FORTUNA (Antonini Adit, Merlin/DL2 Veins) - As anticipated, they’re already testing and producing and will reach 1,000 TPM by next quarter. New permit applications being submitted for up to 3,000 TPM - should be granted by end of 2025.
CAREN (Larissa Adit) - Application for exploitation at 1,000 TPM already submitted, should be granted within a few weeks.
NOT GOOD NEWS for those who doubted MC.
*** Since they’re still constructing the FF plant, ore will presumably be added to Pile #2 (read production). Hope that FF plant has a lot of … capacity!
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