Auryn/Medinah 2025 2nd half General Discussion

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“BUT AURYN HAS NO NI 43-101 COMPLIANT MINERAL RESERVES/MINERAL RESOURCES AND WITHOUT ‘MR/MR’ YOU’LL NEVER GET FUNDED BY AN INSTITUTIONAL INVESTOR AND YOU’LL NEVER MAKE IT INTO PRODUCTION”

You MiningPlay forum participants have literally heard this probably 100-times by now. So, what exactly is “43-101” and what is a “Mineral Resource” according to the 43-101 Standards and Guidelines and the CIM (Canadian Institute for Mining and Metallurgy) definitions? Is it really true that you can’t get funded or into production without one? Auryn did indeed get funded without an OFFICIAL 43-101 and they are clearly transitioning into production.

NI 43-101 is the Canadian government’s answer to the Bre-ex Mining scandal. This involved a couple of bad guys in Kalimantan, Indonesia drilling holes into their drill cores and hammering in gold acquired elsewhere but on their property. Investors lost billions on the scam. What NI 43-101 does is it sets up “Standards and Guidelines” for CANADIAN MINERS in dispersing news to the public.

What exactly is a “MINERAL RESOURCE”? A “MINERAL RESOURCE” is defined as a concentration of naturally occurring solid, liquid, or gaseous material in or on the Earth’s crust that has a “reasonable prospect for economic extraction”.

With the price of gold, silver, and copper where they are today and with the grades being found at the DL2 Vein what they are, the question becomes does this project have “a reasonable prospect for economic extraction”? Of course it does. It’s not even close.

The next question becomes, if Maurizio opted to put out a press release tomorrow revealing the ounces of “Mineral Resources” that the Auryn geoscientists have calculated to date while following the Standards and Guidelines of NI-43-101, could he label it as being “NI 43-101 COMPLIANT”. No, he could not, so don’t expect one, but expect a press release soon outlining something 100-times as important-EARNINGS.

The text of 43-101 cites the need to perform a FORMAL PRE-FEASIBILITY STUDY, before being able to label Auryn’s MINERAL RESOURCE as being NI 43-101 COMPLIANT. There are a vast number of detailed technical and economic studies that also need to be performed for compliance. Does Auryn have all of that information available in hand. Absolutely. They wouldn’t have made a “POSITIVE PRODUCTION DECISION” without that information and an institutional investor would never have handed over a $4 million check without that information.

Let’s look at this from a different angle. Gold is currently trading at over $4,100 per ounce. Let’s pretend that it was trading at $850 per ounce for a moment. Meeting that “reasonable expectation for economic extraction” hurdle would be a different story. At a POG of $850 per ounce, might Auryn have had to do a diamond drill program on the veins and execute a Pre-Feasibility Study prior to Maurizio or the financial institution being willing to advance the funds they advanced? That’s quite possible if not probable. It would have probably taken about 4 years to do the diamond drilling program and do the PFS. Instead of having 70 million shares outstanding, Auryn could have easily had perhaps 700 million shares outstanding NOT TO MENTION NO PRODUCTION IN THAT 4-YEAR PERIOD.

With the approach they opted to take, did Auryn really “cut corners” by circumventing the “traditional approach”? As an investor, I am extremely confident that the mine life of the project is extensive and the number of ounces of MR/MR in the ground is significant. Am I, as an investor, willing to undergo all of that dilution of my share position in order to find out the exact number of ounces of MR/MR present and the exact length of the mine life or the exact “Internal Rate of Return” (IRR). Heck no. I already know for a fact that it is adequate, and I have already checked off on that “box”.

It’s not very often that a junior miner can put a mineral prospect into production at a time in which the prices of the gold, silver, and copper are ALL trading at or near all-time highs. So, does Auryn really have a project with a “reasonable expectation for economic extraction”? Absolutely. In fact, when the actual production figures come out soon, that information will be worth 100-times the information contained in a FORMAL NI 43-101 TECHNICAL REPORT. In the meantime, it might be wise to trust the due diligence capabilities of the institutional investor that just cut a check for $4 million while extending extremely favorable terms.

In a recent quarterly update, Auryn cited that they had in their possession “detailed cash flow analyses” for the project. They shared them with the financiers. Who knows, the analyses may have been done by the financiers.

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Thank you for making this crystal clear, BB. Though some of the info may be your guesstimate or opinion, I know it’s a well-educated opinion. lol!

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He makes a great point - that institutional investor saw the evidence of mineralization and placed their bet accordingly, not requiring a load of drill core to go with it. I think I’d trust THEIR judgment; they put their money where their mouth is.

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Bootstrapping MIGHT (and I emphasize might because it has not yet happened) pay off handsomely but as in life there is always a trade off. We are suffering through decades of stuck money, so let’s stop pretending like this was a no brainer decision. Its coming up on a decade since MC’s Las Vegas meeting. And it BETTER pay off handsomely or this will prove to have not been worth it. Our money is still stuck in Mdmn and MC is not treating AUMC like a publicly traded stock. So he is not doing shareholders any favors in that regard. This institutional investor you speak of could be an inside deal kickback scheme for all we know. Thats what happens when you don’t disclose information to the market. The market will not give you the benefit of the doubt. The financials are not audited and we are on thr OTCs with zero accountability to the shareholders other than what they choose to give us. Baldys 1000% correct, this is not investable to the broader market.

BB is also correct in that this has an ENORMOUS POTENTIAL to skyrocket with only 70M shares outstanding. But thats all it is right now, potential. It will remain potential until MC treats this like a publicly traded company. This needs to go up 10x just for this to be merely a mild success for most. In my opinion Baldy is not negative, he is watching closely and interested in getting in the game but he’s wise to wait for actual investable information. The $20M deal is completely in the dark and in my opinion SHADY. The fact that they won’t give details makes it shady. It may not be shady at all but its their fault for giving any semblance of a concern that it could be. Release the dam details and get Mdmn back trading. Inexcusable.

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Your words speak the truth For most of us this past decade being invested in this has been a nightmare with a few signs of day break. 10x really is not enough specially with the price of gold and silver being where it is. I have always believed in the mountain. That day is near.

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This investment was a LONG-SHOT 20 years ago, like stepping up to the craps table.

The professor has schooled you over and over and over that the odds were 1,000:1.

In fact, you have better odds at the craps table, close to 50:50 if you know how to play it right.

Every person here KNEW that - unless you are either not very smart or just a cry-baby who got a PhD in victimology and now wants to change the narrative.

Nothing has changed, EXCEPT now:

We are on the doorstep of production with an equity structure that any other company in the world would ENVY.

All thanks to MC and Wizard.

So, people oughta just shut the ____ up and enjoy all these realities for which we should be very grateful - there is absolutely nothing/zero/null set/empty set/nada you can do now anyway. You cannot even sell. You’re stuck. Nothing you can do, except hope for the best. Even indirect attacks against MC and management are meaningless, counter-productive, and against our own interest.

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:graduation_cap: :face_with_crossed_out_eyes::face_with_hand_over_mouth:
a PhD in victimology? Nice

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100 times was not enough.

BB, If you could just pause and admit that this investment has been an unmitiaged disaster BUT are hopeful for the future based on a tight share count and confidence in the asset, you may restore some credibility. However, you have NEVER questioned the path of Maurizio nor the team that preceded him in over 25 years. Not once.

By the looks of it, AUMC may actually reach production with the help of an “institutional” investor in the coming months. Congrats. After 20 years of claiming that AUMC didn’t need a MR/MR you finally landed a financing. This financing could be draconian, predatory lending, with a huge equity kicker. Who knows. Maybe the lender is looking to take the asset if the debt obligations are not met? Maybe its a cheap source of capital.

But its the journey that you cannot ignore. Because Les and JJ didn’t spend $5-$10M twenty years ago and, yes, increase the share count a bit, you have been riding a losing horse.

Without a resource or mine plan Les and JJ were forced to court extremely shady finaciencers (Ulander) which lead to dead ends while the share count increased to cover overhead. Again and Again, failed attempts b/c no legitimate $$ would consider a mountain built on a “gut” nor historical resources.

Fast forward to Maurizio. Without a resource or mine plan the company has predicted imminent production a dozen (?) times? For over a decade. The Caren mine turned out to be a dead end b/c nobody bothered properly understanding transport costs (these costs would have been mapped out in a feasibility study if there was one). Pivot again. Multiple false starts on production. Predictions of landing an offtake agreement (not going to happen without a MR/MR). Chasing a vein for a year. Trying to raise equity for a year. Back to Enami and then the “DISCOVERY” that the ore was refractory (which would have been evident in any feasability. Then another year before landing financing (which nobody knows anything about).

So congrats! You were right BB. All of the naysayers were wrong. Who needs a MR/MR when you can just wait a decade (two decades?) before knocking on the door of production. Many ironies, the first being that 90%+ of the investors dragged into this mess a either no longer alive or have long exited. Would they have preferred a bit of dilution in exchange for a feasability study? The second irony: there has been massive dilution in both AUMC and MDMN regardless of a MR/MR. One stock doesn’t even trade and original holders in AUMC have been crammed down. Massively.

So to recap. Yes, today’s current share count is air tight. The share price isn’t moving in a massive bull market but BB’s gut is telling him that there are millions of ounces in the hill. Once a plant is built they will go right back to chasing a vein and investors, who own a fraction of their orginal investment, are hoping to learn the details of the financing and praying for dividends in lieu of the typical catalyst the market requires to drive “IRRs.”

BB was right all along.

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I’ll take the equity structure of a company that has 70M shares outstanding, admittedly with drama in the past, OVER a company with 921M shares outstanding. All day, every day. The pain is behind us.

But, at least the company with the 921M shares outstanding has the advantage of knowing where the gold is and can write it down on their financials, as opposed to the company with only 70M shares outstanding.

Oh, I forgot, AUMC knows exactly where every one of those veins are and where they go - and there’s 7-8 of them, with perhaps 20-24 more - enough to keep AUMC busy (and us receiving dividends) for the next 50+ years. That’s what I saw on the bathroom wall anyway - and I happen to believe it (but not those other three lies).

Maybe the best kept secret in the entire stock market?

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Says the shareholder who read mutiple press releases claiming they found the ADL, again and again. I’m sure they have it figured out by now. Just bad luck.

I’d much prefer 70M shares outstanding. A reverse split is pretty magical that way. PPX could do a 10 for 1 reverse split too, then they would only have 90M shares oustanding. And you, as an investor would own 10% of the shares before the split. This is what happened to AUMC. Along with the reverse stock split a new “owner” took 75% of the equity based on claims that this new owner was fully funded to bring the project into production. Sooo, as an investor in AUMC you owned 90% less shares and you owned 75% less equity BUT BUT now you only have 70M shares in the float. Definitely something worth celebrating.

Alas , this is a new day. Today is the reality the past can be forgotten. As long as you bought 15x more of your original investment in AUMC, you would have the same percent ownership in the company as you had a decade ago at an IRR of zero. This would have been a terrible financial decision BUT if you had followed this script you would, indeed, be entitled to claim the 70M as favorable outcome.

Now, re-read the last two paragraphs with the knowledge that AUMC didn’t actually do a 1 for 10 reverse split in 2018.

The reverse spit was 1 for 100…

Soooo, while Bubba and BB are tap dancing about a tight float and all of the advantages of not having a MR/MR let’s keep in mind that the ACTUAL float, readjusted for the split is 7 BILLION shares. So you can take the 7B shares (adjusted for the reverse). I’ll take the 900M shares with a resource, without a reverse split, and a great return on investment.

How do you like those apples?

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We haven’t discussed what kind of tax liabilities Auryn might be facing soon. I’m going to guess that Auryn’s tax liabilities for the first several years is going to be de minimis because of the money they have put into the project over the last decade. The new Chilean “Small Mineral Producers Statute” offered junior producers BOTH favorable tax treatment and streamlined permitting approvals IF they voluntarily keep their initial production rates at 1,000 Tonnes Per Month per adit or lower.

In Chile, mining companies can carry forward tax losses indefinitely, but the annual deduction is capped at a percentage of taxable income. This allowance is adjusted for inflation which is currently at 4.4% in Chile. Recent tax reforms, including the 2024 Mining Royalty Law, have altered the tax landscape for the mining sector, affecting how companies utilize these losses.

Tax loss carryforward rules

  • Indefinite carryforward:

  • Net operating losses can be carried forward indefinitely and applied against future taxable income.

  • Inflation adjustment: Carried forward losses are adjusted for inflation (cost-of-living).

  • No carryback: Chile’s tax system does not permit the carryback of losses.

  • Annual deduction limit: A recent reform to the Income Tax Law introduced a limit on the amount of tax losses that can be deducted each year. For fiscal year 2025, taxpayers can only deduct losses for up to 80% of their taxable income. This limit decreases to 65% for 2026 and to 50% from 2027 onward. You can see the incentive for Auryn to start producing ASAP when the deduction limits are higher.

Impact of the new mining royalty on tax losses

The Mining Royalty Law (Law No. 21.591), effective January 1, 2024, significantly changed the tax burden on large-scale mining operations and introduced new considerations for tax loss utilization.

  • Maximum tax burden: The law establishes a maximum potential tax burden (corporate income tax, royalty, and final taxes) of 46.5% for most large mining royalty taxpayers. For producers with sales below 80,000 metric tons of fine copper (MTFC), the cap is 45.5%. This cap can effectively limit the total tax paid, including the portion covered by tax losses. [THIS APPLIES ONLY TO THE MAJOR MINERS AND THEIR COPPER PRODUCTION]

  • Exemption from ad-valorem royalty: The new royalty has an ad-valorem component, but a mining operator with a negative “Adjusted Mining Operational Taxable Income” (RIOMA) is exempt from paying this portion of the royalty.

  • Calculating Adjusted Mining Operational Taxable Income (RIOMA): RIOMA is based on a miner’s taxable operating income and factors in startup costs, depreciation, and financial expenses. When RIOMA is negative, the ad-valorem component of the royalty is offset by this negative amount.

Considerations for foreign investors

  • Worldwide taxation: Resident entities in Chile are taxed on their worldwide income, while foreign-source income is recognized for taxation when received. A tax credit is generally provided for foreign taxes paid.

  • Double Tax Treaties (DTTs): Foreign owners in jurisdictions with a DTT are entitled to a full credit for the First Category Tax (Corporate Income Tax) paid by the Chilean company. The 2024 US-Chile DTT also includes benefits that may affect overall tax exposure and capital gains planning.

  • Tax stability: Companies with existing tax invariability agreements are governed by the rules in effect as of January 1, 2022, until their agreements expire.

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Wow, thanks for the in-depth research on that!

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Sounds like sour grapes! :rofl:

Baldy, please get off your high horse and return to the stock you prefer making money in. It is clearly not AUMC … and no one here needs to hear you repeat yourself ad nauseam.

FYI: For those needing accurate information the float is 9,196,986 unrestricted shares of AUMC; (not the funny math of a non shareholder coming up with 7 Billion!) there are 60,803,014 restricted shares. It is an extremely tight float.

EZ

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In early April of 2018 there would have been approximately 7 billion shares out. After a 1 for 100 reverse split in late April there was a “tight float” of 70 million shares. Magic! Funny math is trying to compare a company with a lot of shares outstanding (PPX) that has NOT done a reverse split to another that went through a MASSIVE one.

I’m not trying to twist the knife. Just pointing out the obvious in that dilution was not somehow avoided over the past 20 years nor part of some grand plan. Billions of shares in MDMN and AUMC were the result of management(s) trying to sell a story vs. a resource and racking up lot of bills (issuing shares) in the process. It would be insane and insensitive to all of the financial losses to even suggest that this was the right path. And yet…

To be clear, many off the shares came with Auryn essentially wiping out existing investors in CDCH by claiming to “sell” their portfolio to the LUCKY CDCH shareholders in Dec 2017.

To provide liquidity to these companies and give their shareholders direct ownership in the underlying asset, AURYN has sold its mining claims to Cerro for 6,650,000,000 common shares of Cerro and cancellation of Cerro’s AURYN shares. The remaining AURYN shareholders now own 95% of the issued and outstanding shares of Cerro. These shares have a one-year restriction on them. AURYN will work with its shareholders to convert their AURYN stock to CDCH stock.

Cerro’s outstanding shares (~350M) was considerably tigher than MDMN (2B) which shouldered most of the legal and illegal share issuance. Back of the napkin math: existing CDCH shareholders went from owning 100% of 350M shares to 5% of the new entity. Keep in mind, many around here praise Maurizio for that outcome!! (95% dilution in CDCH and a halted stock in MDMN).

I will give credit where its do. At least there hasn’t been any new shares issued since 2018. But not for a lack of trying. Maurizio essentially owned the entire asset after the “restructuring” so it was clearly in his interest to keep things “tight”. Thankfully, folks like the “Wiz” received shares AFTER the reverse split. Anything held going into it would have been crushed (equivalent to .007 cents at today’s price).

Time for me to go back into my hole until the January update. Nothing to see or do here for another long stretch.

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No! ??? It is clear you are here expending your energy to promote the company in which you have found some success. Your ego drives you, Just my opinion. There is no legitimate excuse or explanation for an ex shareholder to continue to relive the past the way you have done here to the detriment of your image and reputation.

The MDMN and CDCH “story” was one of the great scams typical of Vancouver penny stock scams. Yes, I and every shareholder of both companies were scammed by Les Price and others that cost me, you, and all shareholders to loose a great deal of cash on an incredibly mineral rich property. The big difference between me an you (and other shareholders) here is that I fully accept my poor investment decision. It was mine and mine alone. I don’t blame anyone else. The other difference is that you gloated about the great decision you made and took the tax loss hoping to recover it later. Although I have a great loss, it is only a paper loss while I patiently await a profitable recovery.

Yes, there was great dilution. The 3B fraudulent shares in MDMN were effectively worthless given the terms and issuance of the preferred shares. Shareholders are fortunate there was the possibility of an actual mine behind the story, otherwise the SEC would have likely shut the whole thing down. Due to all the legal entanglements we, as shareholders, were fortunate to freeze MDMN’s issuance and deal with the legal issues and maintain the large majority of MDMN’s position in the district. Of course you are reckless in assuming others are to blame. That part of the story is long gone, and so is Les. I am responsible for my decision to invest in AUMC and have nothing but gratitude for MC doing everything possible to keep this company viable.

I can assure everyone here, even you John, there has been no dilution since MC started developing the project at great personal expense. All money that MC or anyone else has put in was to develop the project or keep the company afloat. In addition, MC has carried all the costs of keeping properties clean and taxes paid - all to be paid back with no-interest and no dilution.

It is clear to me that AUMC has nothing to offer you here except your continued regret at making a poor decision a long time ago that continues occupy your head incessantly rent free. I wish you well in your new investment John. Please peddle your new company elsewhere.

EZ

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It never occurred to me the hairless one could have been trying to win me over to invest in another company (one in which he says he is now invested). Good catch. I think I’ll stick with the company that will give me 13X+ in return higher than that other company, given the same level of production and grams per tonne.

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Well stated, EZ. Thank you.

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We also shouldn’t lose sight of the fact that AUMC added a lot of expanded claims beyond the original holdings that MDMN and Cerro had to start.

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I vaguely recall Mike Gold (?) many months ago talking about some placer claims down at the bottom of the mountain? I could be wrong on that.

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Its pretty obvious that’s one of his motives. The other one was trying to sell MC financing through his private equity firm. Lastly, he has a burning bone to pick with BB that will never die.

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