Auryn/Medinah 2025 2nd half General Discussion

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My position on the stockpile is that it should have enormous value and I emphasized the point that the collateral of the stockpile should have made getting debt-based financing that much easier.

Yes I screamed and yelled when the original financing arrangement was publicized as an equity based arrangement. Then all of a sudden it changed. You’re welcome.

You should be demanding to know why that shady slight of hand happened. Instead you pledge blind allegiance without understanding. Theres no way you can understand because the company hasn’t explained. Thats the problem.

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Short list of items for which we should be thankful:

(1) Wizard being unselfish enough to spend a HUGE amount of time working with MC to fix things so that we at least have a chance to get our investments back and are not being hung out to dry.

(2) MC loaning Auryn $10 Million dollars with ZERO interest in order to advance the cause of this company and not dilute (read: not screw) shareholders.

(3) MC et al being shareholders just like us, thereby aligning their financial interests with ours (read: if the company is successful, so are we …… and they).

There’s much more, but I see a PATTERN here - leadership being honest, unselfish, and JUST.

Honestly, with a 70 Million share equity structure ….. and production as “anticipated” (look it up), Auryn DESERVES to make a few side financial deals to enrich themselves, even if it involves re-channeling some dividends for a short period of time to pay them off. My computation above should have exposed just how IMMATERIAL such a deal would have been. Not that they HAVE made side financial deals to date to benefit themselves - one could reasonably conclude that they were making deals with related companies of contractors to facilitate OUR SUCCESS.

STOP with the suggestions of fraud or dishonesty (“shady slight of hand”, etc.) and nit-picking.

We’re out here blowing in the wind ……. and could have been (and still could be) abandoned at any time - and we’re gonna attack these people?

Disgusting.

Govern yourself accordingly.

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I get it. We came from an extremely vulnerable place where MC and co. could have just piled on. I don’t disagree with that. Be careful with making statements such as they deserve to make side deals to enrich themselves. Thats an absurd statement to make. He seized control of the entire property and will likely yield multiples of his investment on this. If you have a problem with demanding answers to legitimate questions such as why did a $20M equity based deal suddenly change to a service agreement, then I don’t care to dialogue with you. I’d venture to guess I have more money riding on this than you. I’m not a resident basher. I happen to think everything is positioned well for this to be successful. I don’t care for the black cloud that hovers over inexplicable events such as the one mentioned above. Your and others willingness to sweep this under the rug because of MC’s leverage is a dangerous stance to take.

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Hi Rod,

Thanks for the questions regarding the “PE MULTIPLE” study I’ve cited many times and my modeling of Auryn’s AISC costs. People get confused and think that the PE “MULTIPLE” has to do with PRICE PER SHARE divided by ANNUAL EARNINGS. It’s not; it’s PRICE PER SHARE divided by earnings PER SHARE.

For example, a corporation’s annual “EARNINGS PER SHARE” (EPS) is calculated by dividing NET INCOME by the number of shares outstanding. If a company has 70 million shares outstanding and they have an ANNUAL NET INCOME of, let’s say, $28 million, then their “EARNINGS PER SHARE” will be 40-cents ($28 million divided by 70 million shares). If this company trades at a “PE MULTIPLE” of 30, then it would be trading at 30-times $0.40 or $12.

The Stern College of Business at NYU does these “PE MULTIPLE BY SECTOR” surveys annually. A couple of years ago, before the price of gold exploded, the survey reported that the average “PE MULTIPLE” in the mining and metals sector was 31.1. Today, their survey says it is a lot higher (64.56) due to the “multiple expansion” associated with the price of gold continuing to go nuts.

“Intrinio/Sharadar/FullRatio” also does the same survey. Theirs came in at 30.02 for the “GOLDMINERS” this year. You might play it safe and just assume that it is “30 or higher” for the industry Auryn/Medinah are in. I could easily make the case that Auryn’s proper “PE MULTIPLE” should be well over the average figure for this sector because of their enormous GROWTH POTENTIAL in the very near term. They might be able to increase their operating sites from 1 in Q-4 of 2025 to perhaps 8 in “X” number of quarters. But I’m not going to make that case. Just stick with “30” for now and use that for modeling the appropriate share price based on “EARNINGS PER SHARE”.

Below are some links”. The first is the most recent study done by the Stern School of Business at NYU. The second link contains information regarding the concept of EARNINGS PER SHARE. The 3rd link is to the sector-by-sector survey done by “FULL RATIO”.

Price Earnings Ratios

Multiples: First Principles

PE ratio by industry - FullRatio

A corporation’s annual “EARNINGS PER SHARE” (EPS) is calculated by dividing NET INCOME by the number of shares outstanding. The “PE MULTIPLE” is DIFFERENT, it is the price per share divided by the annual EPS. There is an even more accurate ratio known as the “PEG” ratio OR “PRICE EARNINGS TO GROWTH”. This factors in the “ANNUAL GROWTH RATE” OR “G”.

“PE MULTIPLES” are highly dependent on 2 factors: GROWTH RATE and INVESTOR SENTIMENT. Right now, the GOLD MINING industry is about as hot as it gets as far as “INVESTOR SENTIMENT”. This has led to “PE MULTIPLE EXPANSION” as seen in the 2 most recent NYU surveys. This translates into investors being willing to pay more for companies in this sector.

What has happened to the “appropriate valuations” for a gold producer like Auryn is transitioning into, in the recent past as the price of gold has exploded? Two things are occurring simultaneously. With the POG being up so much, “EARNINGS PER SHARE” is going nuts. But so too are the “PE MULTIPLES” for this sector because of “PE MULTIPLE EXPANSION”.

Just look at the NYU study and the appropriate PE MULTIPLE increasing from 31 to 64 in the last 2 years. “INVESTOR SENTIMENT” is way up. If the appropriate share price equals the EPS multiplied by the proper PE MULTIPLE, and if BOTH of these factors are moving up simultaneously, then the “appropriate share price” is going to go up A LOT. Five times five is a lot more than three times three.

A company like Auryn, which is a brand new “PRODUCER”, can grow PRODUCTION and therefore EARNINGS PER SHARE aggressively as it ramps up its number of operating sites from, let’s say, 1 in Q-4 OF 2025 to perhaps 8 in “X” number of quarters. We need to wait for “FORWARD GUIDANCE” from Auryn management in order to estimate what “X” is. Can they add 1 operating site per quarter? We’ll know soon enough.

Auryn has already listed the location of 8 operational sites which they’re working on opening up. These include the DL2 Vein, the Caren Mine (Larrissa Adit), Merlin 4 Vein north, Merlin 4 Vein south, Merlin 1 Vein north, Merlin 1 Vein south, and 2 new operating sites associated with “Fortuna 1913” (“1913” refers to the elevation in terms of meters above sea level).

Because of the ability to rapidly ramp up production i.e. “GROWTH”, “the market” will typically award Auryn’s share price with a higher “multiple” of EPS than they would a miner with no ability to ramp up production. The “PE MULTIPLE” is forward looking. A major miner typically can’t ramp up production as rapidly as a company like Auryn can when the price of gold moves up. When the price of gold is breaking out to the upside, all of the miners will likely experience “multiple expansion” because “the market” will anticipate that this trend might continue.

A company like Auryn, with both the ability to rapidly ramp up production and therefore EARNINGS PER SHARE, and being in a sector in which the POG is breaking out to the upside leading to “MULTIPLE EXPANSION”, should command a very healthy “multiple” of EPS. You need to factor in also that Auryn is primarily a GOLD producer. About 82% of its income will be from the gold component of its “float concentrate”.

Within the “MINING AND METALS” sector, the “GOLD PRODUCERS” are always awarded a higher “multiple” than the base metal producers. Thus, the average “multiple” for a gold producer will likely be higher than the average “multiple” cited in the NYU study because the NYU study involves all miners, both of precious metals as well as base metals. It’s “the market” and investors that award “multiples”. Investors want to see GROWTH.

So, between Auryn being a “gold producer”, a “gold producer” able to rapidly ramp up its PRODUCTION PROFILE, and the price of gold showing no signs of slowing down, the likelihood is that Auryn’s share price should enjoy a healthy “multiple” of EPS. In this sector, you need to keep in mind that with incremental increases in the price of gold, those increases tend to drop straight to the bottom line. “The market” knows this and it is the arbiter of appropriate “PE MULTIPLES”.

With the recent increases in the POG, the universe of potential investors has also been increasing. Most “generalist” investors have less than one-half of 1% of their investments in precious metals. They will undoubtedly be looking for “producers” that can DIRECTLY benefit from the increased POG especially any PRODUCERS whose share price has NOT already gone up 100% or more. This opens the door to PRODUCERS like Auryn that are brand new to the PRODUCER category.

Many of the major miners have already gone up 100% to 150%. Some of their shareholders have taken profits and are now sitting with a pile of money while looking for “GOLD PRODUCERS” whose share price has NOT gone nuts yet.

Why is it important to know about EPS and “PE MULTIPLES”? these are very good “screening tools” to determine if an investment under scrutiny is grossly overpriced or not. If you notice “PE MULTIPLE EXPANSION” going on, you’re probably investing in the proper sector.

AURYN’S ALL IN SUSTAINING COSTS OR “AISC”

Since 2013, the World Gold Council has pretty much mandated that all of the miners report ALL of their costs on a “per ounce” basis including the “SUSTAINING COSTS” needed to “sustain” the current levels of production.

There are about 10 categories of ALL IN SUSTAINING COSTS for Auryn. The largest is typically the “ON SITE OPERATIONAL DIRECT COSTS” which we used to refer to as “C-1 Cash Costs” (labor, diesel, electricity, machinery maintenance, consumables, etc.) Some of the other line-item costs include: “CRUSHING AND GRINDING COSTS”, “ON-SITE ORE PROCESSING COSTS” (froth flotation-related), “TRANSPORTATION COSTS” “GENERAL AND ADMINISTRATIVE (“G and A”) costs, ”EXPLORATION COSTS”, “OFF-SITE ORE PROCESSING COSTS” (smelting and refining “T/Cs” and “R/Cs” treating and refining costs) SUSTAINING CAPITAL EXPENDITURES (often diamond drilling to replace the number of ounces of MR/MR mined annually), and “RECLAMATION COSTS”, and “COST OF CAPITAL”.

Auryn presents a very interesting study when it comes to estimating AISCs. I don’t know if I’ve ever done an AISC estimation that comes in as low as Auryn’s. First of all, GRADE is the primary determinant of AISCs and Auryn’s GRADES are pretty much off the chart especially in regard to the level 3 area of the DL2 Vein.

“TRANSPORTATION COSTS” provide a good insight as to why GRADE is so critical. Keep in mind that all costs are reported on a “PER OUNCE” basis whether it be “PER OUNCE TRANSPORTED” or “PER OUNCE” smelted, etc.

Let’s assume that the average “intra adit head grade” being mined by Auryn at the DL2 Vein comes in at about 20 gpt. The “average” miner mining “narrow vein” deposits in an underground fashion worldwide is about 4.18 gpt. For this “average” miner, without any ore processing plant on-site, they will be shipping ore with a grade of 4.18 gpt gold. In a 20-tonne truckload of ore, this “average” miner will TRANSPORT 20 Tonnes times 4.18 gpt equals 83.6 grams of gold.

Auryn is going to be starting out with an “intra adit head grade” of about 20 gpt gold but then they are going to be froth floating that raw ore and thereby magnifying the grade by an average “concentration factor” of 5-fold. This means that the “float concentrate” that Auryn will be TRANSPORTING will average a grade of about 100 gpt. A 20-tonne truckload of this “float concentrate” will contain about 2,000 grams of gold instead of the 83.6 grams of gold that the “average” miner will be TRANSPORTING. Each 20-Tonne truckload of Auryn ore will contain about 23.92-times as much gold as that of the “average” miner’s trucks.

The COST to TRANSPORT one truckload, round-trip, is the same for both Auryn and the “average” miner. Auryn’s TRANSPORTATION COSTS on a PER OUNCE basis will only be about 4.18% of that of the “average” miner. The cost savings are due to firstly, the superior grade of the Auryn ore and secondly, the fact that Auryn spent the time and money needed to build their own FF plant. An FF plant will often pay for itself in about 15-months.

A similar phenomenon occurs in regard to “ON-SITE OPERATIONAL DIRECT COSTS” to bring one bucket load of ore to the surface. The costs will be the same for Auryn and the “average” miner but Auryn’s bucket load of ore will contain about 4.78-times as much gold as that of the “average” miner on a “PER OUNCE” basis i.e. 20 gpt divided by 4.18 gpt gold.

In mining, the saying goes that “GRADE IS EVERYTHING”, now you know why. When you add up the 10 or so line-item entries for AISC for the “average” miner and Auryn, it won’t even be close. The “average” AISC for the “average” miner in 2025 was $1,510 per ounce. My estimation is that Auryn will come in at right around $800 per ounce.

With Maurizio being willing to advance all of the cash needed for Auryn to make it all of the way into PRODUCTION while charging zero interest, Auryn’s “COST OF CAPITAL” for the last 7 or so years was ZERO. The “average” miner, if they could qualify for debt financing, would probably be paying 12 to 15% for capital because of the enormous RISKS involved in mining. Rick Rule, a household name in mine financing, gets about 17% when he funds a miner. Since most young miners rarely qualify for a debt financing, their COST OF CAPITAL is usually MASSIVE LEVELS OF SHARE STRUCTURE DILUTION. Auryn has never sold a share to raise a penny of working capital. They had a tiny number of shares outstanding 7 years ago, 70 million, and that is how many shares they have outstanding today. I’ve never seen that in 45 years of investing in this sector.

WHY IS A TINY AISC AND A TINY NUMBER OF SHARES OUTSTANDING SO IMPORTANT?

This brings us back full circle to the above discussion on EARNINGS PER SHARE and PE MULTIPLES. A tiny AISC translates into a very high level of TOTAL EARNINGS. A tiny number of SHARES OUTSTANDING, in the presence of a very high level of TOTAL EARNINGS, translates into an EXTREMELY HIGH EARNINGS PER SHARE (EPS) figure. An EXTREMELY HIGH EARNINGS PER SHARE FIGURE when multiplied by a VERY HIGH PE MULTIPLE (somewhere around 30, as discussed above) translates into an EXTREMELY HIGH APPROPRIATE SHARE PRICE.

If you have the time, take the time to learn about things like EARNINGS PER SHARE, PE MULTIPLES, and how to estimate an AISC. Also take the time to DO THE MATH. You have all of the formulae right in front of you. As the actual numbers are revealed, plug them in and DO THE MATH. The very act of DOING THE MATH allows the TRUTH to be revealed.

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That means there are some PEs that are less than 31.1 and some more (unless they are ALL exactly 31.1, unlikely). My bet is ours will end up being much higher when the dust has settled, precisely because of what the professor said about us getting ramped up the first year or so, not to mention the very low AISC.

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Hi MrB,

One would assume that the distribution would follow a “bell curve” with as many corporations above the average as below the average. The corporations above the average would be those able to GROW the quickest, those that are mainly GOLD PRODUCERS versus base metal producers, those with a low AISC in the bottom decile of the miners, those with a tight share structure, those with management teams with a lot of “skin in the game” as well as their shares being semi-restricted from resale by Rule 144, etc.

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Looks like we check the box on all those - when our boys get cranked up, I won’t be surprised to see a very high PE. I actually think the dividend rate will drive the price of the stock up too, as people make investment decisions based on anticipated return too. This is the “capitalization” computation to which I have referred in the past. In other words, if a stock is paying $X quarterly dividends, what SHOULD its price be?

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Hey DD, whats that stockpile worth today :grinning_face:

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Congratulations to Kevin Tupper, Ex-CEO of Medinah Minerals

Kevin Tupper Named Microsoft Chief Architect of AI Transformation, Federal AI Evangelist

Kevin Tupper, a 30-year industry veteran with extensive experience in artificial intelligence, shared on LinkedIn Friday that he has been appointed chief architect of AI transformation and federal AI evangelist at Microsoft.

The Microsoft executive will be tasked with driving AI adoption and innovation within the federal sector, including the growth of its AI portfolio including Microsoft 365 Copilot, generative AI and automation at scale.

Tupper said he will leverage his leadership experience, business know-how and deep knowledge of utilizing emerging technologies to empower individuals and communities in his new role as an AI evangelist for the public sector.

Kevin Tupper’s Career History

The executive has had two stints at Microsoft during his three-decade career. He most recently served as principal cloud solution architect and AI evangelist. He spearheaded a team of cloud solution architects that accelerated the transition of big data, advanced analytics, AI and machine learning and cloud services from concept to deployment for federal agencies.

Before rejoining Microsoft, Tupper spent a year as the chief technology officer at For The Record. His first stint at Microsoft lasted for almost three years. He was a cloud solution architect and AI ambassador for a year and a data and AI technology specialist before that.

Tupper also served as senior architect and application project manager at Dimension Data and chief technology officer at AIC Communications from 2011 to 2013. He started his career in 1995 as a consultant and CTO of EZLinks Golf, a global tee time reservation company.

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Always knew he was Brilliant. Way to go, Kevin. Congratulations!

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Back before Kevin got rich and famous, he used to call me all the time asking me to decipher the scientific language used in some of the Auryn/Medinah press releases. He and Maurizio were meeting in NYC a while back and they called me from their hotel asking me some questions about geological concepts and the history of Medinah dating back to when Gordon House. P. Geo. was running the exploration program. I think they think of me as being the local “historian”.

I used to bug Gordon nonstop while peppering him with questions about geological concepts that only he and I would find interesting. I used to teach biochemistry to pre-doctoral students and “geochemistry” is very similar to biochemistry, except my patients are still alive and Gordon’s (the rocks) aren’t.

He used to press the issue that the ADL Mining District’s “Gordon breccia pipe”, named after him (its discoverer), was no average breccia pipe, it was an actual “DIATREME” or more accurately a “MAAR-DIATREME BRECCIA PIPE”. These are formed when super-heated hydrothermal fluids and gases emanating out of an underlying magma chamber encounter water on their ascent towards surface. There are a series of gigantic explosions and the earth’s surface ends up with a concave “dimple” at the explosion site after the super-heated rocks cool and contract. This phenomenon has a $100 word associated with it. It’s “phreatomagmatism”. Use that on your next game of scrabble.

This is a positive sign for the exploration geologist. It signifies that there was a lot of explosivity involved and this causes rock fracturing and the fractures/faults within the rocks can get filled up with metal-bearing fluids that later cool and become “veins” or sometimes “skarns” if there is plenty of limestone in the area. Our deposit at the ADL is of an age referred to as “EARLY CRETACEOUS”. “Creta-” is Greek for chalk which comes from limestone. Our deposit has plenty of limestone which is great because limestone is “wimpy”, as Gordon would say. The super-heated hydrothermal fluids simply push it aside and “replace” it with calc-silicate rocks full of lots of metals. This gives rise to a “REPLACEMENT DEPOSIT”, like ours.

Nobody talks about it, but the “elephant in the room” at the ADL Mining District, isn’t all of those high-grade veins that are about to make Auryn a fortune. The star of the show is going to be the copper-moly porphyry that gave rise to all of these other structures. Auryn/Medinah refer to it as the “Pegaso Nero” porphyry prospect. We can’t call it a “deposit” yet until a couple of holes are poked into it indicating “continuity to depth”. At the “Auryn informational meeting” in Las Vegas several years ago, Maurizio suggested that the Pegaso Nero was probably going to be too big for Auryn to take on single-handedly, and they would probably need a major or perhaps a consortium of majors to tackle it if it is deemed to be “economic”.

With the current prices of gold, copper, and silver, I don’t think being “economic” is much of a concern. The “economics” of a porphyry deposit do not have to do as much with GRADE as they do SIZE. Porphyries are relatively low-grade deposits with enormous size and extended mine lives. One unanswered question I’ve had has to do with whether or not the extremely high grades of the various veins “telescoping” out of the porphyry might suggest that the porphyry itself is of a higher grade than the average copper-moly porphyry. There are several classes of porphyries and they’re all “elephants” from a size point of view, but the “copper-moly” type of porphyries, for some reason or another, are the behemoths of all of the elephants.

Kevin and I were two of the largest shareholders of Medinah back in the old days. At one of the Medinah “Annual General Meetings” we were granted access to one of Medinah’s geologists that used to work for the mining major “Teck”. (By the way, a couple of days ago, Teck merged with Anglo in a $53 billion deal). This geologist was especially intrigued with Medinah’s “Pegaso Nero” porphyry prospect.

We went up to his hotel room and he showed us a bunch of maps and drawings. The interesting thing about the “Pegaso Nero” prospect was that it was sitting right at surface on the southern downslope off of the ADL plateau. Sometimes porphyries are located too deep to be “economic”. He told us a story about how at Teck one of his bosses was totally obsessed with a porphyry prospect. Teck spent tens of millions of dollars working on the prospect and sure enough what our new friend from Teck predicted came to pass. This obsessed after porphyry was indeed huge but it was way too deep to be “economic”. OOPS!

At Auryn/Medinah’s “Pegaso Nero”, the molybdenite (moly disulfide) and the surrounding potassium feldspar (“K-feldspar”), which is located at the very center of porphyries where the higher-grade material hangs out, was located right AT SURFACE. The ex-Teck geologist told us that the only spot on earth where he’d ever seen this phenomenon before was in Colorado, which is known for copper-moly porphyries.

He told us that the good thing about copper-moly porphyries is their size. Likewise, the bad thing about copper-moly porphyries is their size. What he explained to us is that the CAPEX to bring one of these behemoths into production was measured in the BILLIONS of dollars. Sure, you might make $10 billion in profit mining it, but you need to come up with $1 billion in order to get the project off the ground. With copper being such a “critical mineral” nowadays, and the need to “electrify” the world and service the EVs and the AI centers, it will probably get done, if deemed “economic”, which I have a feeling will be a no brainer with these metals prices.

TRUST THE AURYN UPDATES

It is my contention that a nonpromotional management team like that of Auryn, is likely to carefully scrutinize all quarterly updates prior to releasing them. So, if you’re looking for “THE TRUTH”, that’s probably the place to start. In a complex industry like mining which deals with extremely complex topics like GEOLOGY, sometimes “THE TRUTH” still isn’t very easy to discern for those unfamiliar with GEOLOGY and especially GEOCHEMISTRY which to many represents “GEOJIBBERISH”. Sometimes investors need an “interpreter”.

Another complicating factor has to do with the HISTORY of a mining corporation like Auryn/Medinah. The Auryn/Medinah story has been playing out for at least the 28 years I have been closely following it. I know, I know “ACCIPERE VITA”. That’s Latin for “Get a life”. Sometimes a “historian” might be helpful.

I can remember when Medinah’s Head Geoscientist, Gordon House, released his first official report on the Alto de Lipangue Mining District back in 1997 or 1998. I probably read it 50-times. In fact, I re-read it earlier this week along with a detailed report done by “Vancouver Petrographics” dated around 2002 or so, right after Medinah drilled a dozen or so holes (of the 31 holes drilled to date) into the “Gordon Diatreme Breccia Pipe”. A “petrographer” is a geoscientist that specializes in taking thin sections of drill core material and studying the crystalline structure of the minerals contained therein using an electron microscope. That report used the term “potassium feldspar” or “potassic alteration” a gazillion times. This is the area of a porphyry where the good stuff hangs out.

Gordon didn’t tell the petrographer where the core samples were taken from. The gist of a 50-or-so page report came up with the conclusion that the core samples we’re definitely associated with a porphyry structure and his guess was somewhere in the “Ring of fire”. The “Ring of fire” is a circular shaped group of stratovolcanoes that encircle the entire Pacific Ocean from Australia and Japan, to Alaska, and all of the way around to Peru and Chile. He was right.

What you look for in a porphyry structure is the core. It is where the high-grade material hangs out in association with “potassic alteration” i.e. caused by potassium feldspar. Diatreme breccia pipes, like the “Gordon diatreme breccia pipe”, tend to “telescope” out of what are called porphyry structures. “Porphyries” are the most highly sought after mineral deposit types on the planet. Why is this? It’s not because of their high GRADES, it’s because of their SIZE and the extended mine lives they represent.

What else typically “telescopes” out of porphyry structures? The answer is epithermal and mesothermal vein structures like the 7 Main Veins within the “Vein Set” that Auryn has on its ADL plateau. What are they known for? This time it’s not their SIZE; it’s their GRADE. The GRADES found to date at Auryn’s DL2 Vein and Merlin 1 Vein are pretty much off the chart.

What is a “Vein Set”? A “Vein Set” is a grouping of multiple inter-related, usually homogenous veins, oriented parallel to each other, and that tend to have similar grades, widths, gangue components, rock chemistries, etc. If you get a good peak at one of them you probably have a good idea of what the others look like. Auryn’s exhaustive trench sampling program which involved over 1,600 samples, revealed over 5,000 lineal-meters of Main Veins that made it all of the way to surface at the plateau. During the drifting of the Antonino Adit, about 140-meters below the plateau surface, Auryn encountered another 24 “veins/structures/mineralized faults” in between 2 of the known Main Veins. They also found hundreds of meters of distinct “alteration”, like the alteration that surrounds gigantic porphyry structures.

What does this suggest? This mountain is “juiced”. The overall level of explosivity of this particular “hydrothermal system” resulted in plenty of cracks, fissures, and faults, all of which represent a wonderful “plumbing system” to transport the gold, copper and silver contained in the hydrothermal fluids coming out of the magma chambers, to get closer to surface. This “plumbing system” not only provides a means for transport, it also provides a nice location for these fluids to cool so that the contents could crystallize into solids.

This particular deposit is 91 million years old and it is “polyphasic”. This means that there were many, many “phases” of explosivity leading to mineral transport upwards. Each phase will result in a “band” within a vein. Auryn’s veins are heavily “banded”. There is a famous “belt” of Early Cretaceous porphyries located to the north of the ADL. The theory all along was that the southern terminus of this “belt” was up north at the Andacollo Porphyry deposit. How old was the Andacollo Porphyry Deposit? You guessed it, 91 million years old, the same age as the ADL deposit. Whatever was occurring in the earth’s crust near Chile 91 million years ago, it sure resulted in a bunch of porphyries. It appears that this “Early Cretaceous Porphyry Belt” may have extended a little further south than earlier thought.

What the ADL Mining District represents is a “TARGET RICH” environment. Medinah never had the money needed to do much exploration. Gordon House discovered the “Gordon breccia pipe”, Auryn and Medinah in combination drilled 31 diamond drill holes into the pipe. This revealed a very large “HYDROTHERMAL SYSTEM” driven by a porphyry or pair of porphyries.

The question arises as to what has happened to the overall value of this “TARGET RICH” environment, extremely underexplored, as the prices of gold, silver, and copper are now trading at or near their all-time-highs. Unexplored areas that may have been “non-economic" before might now be moderately economic. The contents of the 7 Main Veins that may have previously been extremely economic might now be robustly economic. The “mine life” of the “economic” deposits at the ADL in the past may have been “X” number of years. Now they could be “3X”. A rising tide lifts all boats.

The artisanal miners of the DL2 Vein are really the unsung heroes in this whole story. They mined a 350-meter-long stretch of the DL2 Vein which has a known surface “strike” of 1,000-meters. They mined it down to a depth of 100-meters of its known 700-meter depth. Their shipments to Enami over the course of 30-years averaged a stellar 64 gpt gold. This “mom and pop” operation was so inefficient, however, that the “tailings dumps/discards” present today are still running at 14 gpt gold in places. The “discards” are running at 3.5-times the average grade being mined today in similar “narrow vein” underground mining operations.

The extent of the work done by the artisanal miners saved the necessity of Auryn to sell hundreds of millions of shares in order to raise the money needed to fully drill out the vein system and execute PEAs, PFSs, and BFSs (a series of studies determining the economic “feasibility” of a deposit). Auryn rolled the dice and decided to drift the Antonino Adit to a spot about 30 meters below where the artisanal miners ended the vertical extent of their mining operations at what they referred to as “Level 2”. The grades encountered by Auryn at this new “level 3” totally blew away the grades achieved by the artisanal miners at “levels 0, 1, and 2”.

Across the plateau to the west lies the Merlin 1 Vein. The artisanal miners there drifted 3 different adits on the northern downslope off of the plateau. THEY FOUND THE SAME “BONANZA” GRADES AT THE SAME ELEVATIONS THAT AURYN FOUND AT “LEVEL 3” ACROSS THE PLATEAU TO THE EAST. Might all 7 of the Main Veins” within this same “Vein Set” feature similar grades at similar elevations?

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Thanks for sharing an excerpt from your upcoming GEOJIBBERISH book deal, brecciaboy! The amazing geological history of the Alto de Lipangue Mining District & the ‘phreatomagmatism’ phenomenon. :crossed_fingers: :volcano: :microscope:

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Copper-Moly Porphyry - per Gordon House.

One set of 7 main veins, with 24 more structures/faults in between just two of them, the veins tending to have similar grades, but also don’t forget the area of dilatation.

The Gordon Diatreme Breccia Pipe.

100s of meters of distinct alteration.

Good gracious, Auryn is gonna be busy for the next 50+ years mining these veins, long after I’m dead - and my daughter will be posting on The Mining Play.

Also, good history lesson and perspective - the Andacollo Porphry deposit has produced 334 Million ounces of gold to date - and is still producing copper (expects about 45k-55k tonnes of copper this year - temporary pause).

I guess the question I have is whether the Pegaso Nero Porphyry can be developed and moved into production at the SAME TIME we are mining these veins. Of course, a major would have to drill to determine whether they want to put the $1 Billion(est.) into it. If we’re making a killing mining from these veins, I just assume they keep doing that.

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Hi MrB,

You bring up a good point. You have to wonder why they brought in Robert Mayne-Nichol as Auryn’s new “General Manager”. His curriculum vitae reads like a who’s who in the mining industry. He’s been a senior executive at BOTH Enami and Codelco so he’s got connections up the cazoo. He’s been instrumental at both Los Pelambres and Collahuasi. These are 2 ultra-gigantic porphyry deposits.

I don’t sense him as being a “vein” person. Geologists tend to specialize in certain deposit types. He’s a “big game” hunter that is a total brainiac. I read a paper by him regarding advanced copper technologies. Holy smokes! Is Auryn going to get active at the Pegaso Nero? Has Maurizio schmoozed up to some big boys in regard to co-developing the PN? Is RMN our head of that team???

The last we heard about the PN was that Auryn did an extensive “ridge crest” sampling program on the southern downslope off of the plateau over by the “South Road”. They identified a 3.6 Km (north to south) by 1.2 Km (east to west) area Auryn referred to as the “copper anomaly” and the “moly anomaly”. Freeport McMoRan asked for permission to go check it out. Maurizio said OK. Then everybody went radio silent.

What the majors tend to do is to “inventory” properties they have an interest in. They’ll buy somebody like Maurizio dinner once or twice a year and insist that they’re super interested but just can’t quite make a commitment yet. Then the price of gold, silver, and copper go nuts and all of a sudden, they’re your best friend. Who knows? Everybody knows everybody down there and you never know who you might end up being in bed with.

A similar thing might be going on at the Caren Mine. Several years ago, Auryn drifted the Larrissa Adit which is “Adit #3” over on the northern downslope off of the plateau. The grades were fine and Auryn was ready to go and SERNAGEOMIN decided at the last minute that they wanted 3 separate “ventilation raises” installed. We haven’t heard diddly since then several years ago and then in the most recent quarterly update all of a sudden the Caren Mine is teed up and ready to go with a permit due shortly. The same thing happened with the PN, radio silence.

When Auryn announced that couple of hundred meters of distinct alteration they found while drifting the Antonino Adit, which is located right above the PN area, I immediately thought that this bit of evidence might be what is needed to tee up the PN development. Porphyries have these gigantic haloes of “alteration” that surround them. There is a centralized “porphyry stock” coming out of a magma chamber with these concentric haloes surrounding the stock. You don’t run into these concentric haloes unless there is a gigantic “heat source” right underneath you. What you need to keep in mind is that it’s the same metal-bearing hydrothermal fluids that BOTH bring the sought after metals closer to the surface where they can be discovered and mined as well as the fluids that do all of the “alteration”. In essence, the native rock (granodiorite) got “pressure cooked” and converted into a bunch of clays like illite, smectite and alunite. A porphyry is a gigantic heat source that induces the formation of all of these haloes of alteration.

Depending on the distance from the heat source, you get these different types of “alteration”. If you’re super close to the heat source you’ll find “potassic alteration” made up of potassium feldspar, secondary biotite, and magnetite. A little bit further from the heat source you get “phyllic alteration” and sericite. A little further yet from the heat source and you get “propylitic alteration” and epidote and chlorite. The types of alteration provide a road map or “vector” to where the good stuff, the potassic alteration with the higher-grade copper and moly, hang out.

Auryn geoscientist, Luciano Bocanegro, wrote some interesting papers on “vectoring” in hydrothermal systems. He traced the “Gordon Diatreme Breccia Pipe” directly to the PN Cu/Mo porphyry prospect through “vectoring” via charting out which types of clay were present.

At this time, I don’t know if there are bona fide “drill targets” present at the PN or not. If Auryn were to poke a diamond drill hole at the PN and establish “continuity” of a porphyry to maybe 250-meters of depth, then it really would be “game over” and any JV Auryn executed would have terms greatly in favor of Auryn.

When you study porphyry deposits worldwide, you’re always looking for the various components like breccias, low and high-sulfidation epithermal and mesothermal veins, skarns, mantos, etc. At the ADL Mining District, the presentation is that of a “classic” Sillitoe-type porphyry deposit with all of the adnexal structures right in the correct spot.

In regard to a major miner insisting on being “derisked”, the same thing goes with the Las Dos Marias stratabound copper-gold/skarn deposit. Hochschild signed an option which stated that they could earn “X” percent of the action if they spent “Y” amount of dollars. They came in and did some work and delineated 3 juicy drill targets. Then, they did what all of the majors and mid-tiers tend to do. They look at the junior miner and said, OK you pay for these 3 drill holes and thereby “DE-RISK” us, and then we’ll re-work our original JV agreement terms with more favorable terms to Auryn if, if, if the 3 drill holes THAT YOU DRILL reveal “continuity” down to perhaps 200 to 250-meters of depth.

Some Auryn/Medinah shareholders were taken aback because they thought Hoch should be doing the drilling. You’ve got to remember that the deal was set up as an “option”. They “opted” to give Auryn more favorable terms if, if, if Auryn did the drilling. They wanted Auryn to put a little more “skin in the game”.

Over the last 15 or so years, the mid-tiers and majors have tended to be RISK AVERSE. They want to work with juniors willing to shoulder all of the RISK but they are willing to pay through the nose if things like “geologic continuity” is established. The CEO of a major will keep his cushy job as long as he doesn’t screw up. In the “commodity cycles” the majors always screw up. When the price of gold goes nuts, they overpay for deposits when their “currency” (share price) is high. Then when the POG goes down, they “write down” the value of their purchase on their balance sheet. It never fails.

The Hochschild JV never made much sense to me in the first place. They are one of the premier UNDERGROUND VEIN miners on the planet. I think they would have given their left arm to participate at the DL2 Vein project but Maurizio didn’t need them. He had enough personal cash to fund that through all of the way until production. Why share it with Hoch?

Hochschild has been eyeing the ADL Mining District for almost 20 years. That guy on the Auryn BOD named Isaac Burstein doubles as “Head of Business Development” for Hochschild. Kevin met him down in Chile and swears that this was a huge catch for Auryn. He is one of the premier “deal cutters” in all of South America. He has authored some 60 mining deals over his career. Maurizio runs with the “big dogs” and always has.

That guy named Richard Sillitoe that spent 4 and a half days checking out the ADL Mining District a few years back, he’s the most prolific “mine finder” in the history of mining. The saying about him is that the list of world class discoveries that he did NOT discover is shorter than the list of world class discoveries that he DID discover.

The mining community honored him a few years ago at some gigantic forum. On the back of the program was the list of the discoveries he played a role in. It was about 3 pages long. Like I said, Maurizio runs with the “big dogs”. Getting Dick Sillitoe to leave his London digs and fly across “the pond” to Chile to check out a porphyry prospect was a coup. Unfortunately for us, before Sillitoe arrived, Maurizio warned us that his Summary Report was to be kept “in house” for now anyways.

When the cash starts flowing at the DL2 Vein soon, Auryn will gain bargaining strength at the LDM and PN because the “option” will be there to go it alone, for at least a while. At the end of the day, the LDM and PN deposits might be incorporated into the same “open pit”. What will be interesting to see is if there are any “early production opportunities” available at either the PN or the LDM. Both areas have seen past production. There are 2 adits in place now at the LDM.

It makes sense to me that something might be cooking at either the LDM or the PN. You’ve got RMN showing up on our doorstep. You’ve got a completed camp that houses 50 guys, and you’ve got a new on-site assay lab that dramatically streamlines BOTH exploration and production. We’ll see.

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Thanks - RMN and Burnstein, two key players that give us hints - looks like MC is covering all the bases for us! One has to ask himself why MC would have these two involved if there wasn’t something else to consider. Great point.

On review, I see that the veins we have are on the NORTH end of the property, while the PN is on the SOUTH end - so it makes sense that work could be transpiring at both places at the same time without some sort of locational conflict. Here’s a map I remember from sometime back:

Slide 15 Targets
Slide 15 Targets898×598 128 KB

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If BB wrote it, it’s probably 3,000 pages long ! LOL :star_struck:

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I just gotta say, MrBubba says that these mines will be producing for the next fifty years. Well, I’m one who has been invested in these mines for going on 19 years and have not given up. If the 200:1 conversion rate is even close, my family will enjoy stress free lives. Once we hit $18, I will be a millionaire, but I probably won’t be around that long to enjoy it. The wonderful thing about all of this is that my son was/is a friend whose father was heavy invested and told him about it and then I sunk $$$ into it on a gamble.

This friend’s father had actually visited the mines and was convinced that it would be a great investment for the future - I’m sure he didn’t think 20+ years in the future.

I thank MC for seizing on the opportunity and not letting the original share holder down. I do believe there has been a couple instrumental contributors to this blog that have helped me keep the faith, BB being the MVP.

Now we wait….

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Lots of us paddling that boat Sackogold. Or is this a slow drifting raft?

Keep the faith!

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           *”When the cash starts flowing at the DL2 Vein soon…”*

I am so very enthused by what, to me, feels like we’re on the cusp of some sort of imminent breakthrough.

Even though I definitely “should” know better, the fact is that for the past two days I’ve had to stop myself from busting out a couple of dance moves that I do not even have – never even did have…

– madmen

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Hey Jimmy, looks like Gold might break 3700 when the Fed cuts rates on Wednesday. How much do you think that dirt will be worth then?

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