REGARDING THE AURYN QUARTERLY UPDATE DATED 7/15/25
I’ve had several inquiries about the contents of the 7/15/25 update. It can be very confusing if you don’t know the 3-dimensional layout of the DL2 Mine (formerly known as the “Fortuna Mine”) back when it was being worked by the artisanal miners.
THE LAYOUT
The ADL plateau sits at about 2,000 meters above sea level (“2,000 masl”). The artisanal miners exploited levels 0,1, and 2 of the DL2 Vein. The relative elevations were approximately: level 0 1970 masl, level 1 1940 masl, and level 2 about 1,915 masl.
The DL2 Vein “strikes” at surface from SSE to NNW or from about 11 o’clock on a watch dial, with 12 o’clock representing due north, through its center point, to about 5 o’clock. The Antonino Adit was drifted by Auryn with the intent to intersect the DL2 Vein just below “Shaft C” of the “old works”, at the center point of the watch dial.
The Antonino Adit’s “portal” was initiated at about the 1,880 masl elevation level. In the “old works”, there were 7 vertical “ventilation shafts”, designated “A” through “G”, with an average vertical extent of 24-meters. These were constructed by the artisanal miners as well as 5 “ventilation chimneys” (#1-#5) exiting at surface. These doubled as a source of fresh air and as an “emergency exit manway”.
The Antonino Adit was initiated at the 2 o’clock position on this “watch dial”. It would intersect the DL2 Vein at the center of the watch dial. It intersected the DL2 Vein at about the 1,875 masl elevation level or about 40-meters below level 2 of the “old works”. This became the new “level 3” of the mine, where Auryn is currently mining from.
Levels 1 and 2 of the “old works” already have their own access “adits” from the plateau surface, which is critical to saving Auryn a lot of money. There are now 3 adits accessing the DL2 Vein at 3 different elevations. The grades Auryn encountered at the new “Level 3” were head and shoulders above those found at levels 0,1, and 2. Yet the artisanal miners were still able to average 64 gpt gold on their shipments to Enami from levels 0,1, and 2.
You might want to concentrate on this zone in between levels 2 and the new level 3. Auryn did some earlier sampling in this zone in the area of “Shaft A”, well to the NNW of “Shaft C”, and the results were stellar. The grades seem to have transitioned to a much higher level in this zone and at the new level 3.
The new Chilean “Small Mineral Producers Statute”, which became effective on 1/1/24, provides tax savings and STREAMLINED PERMITTING for Chile’s “Small Mineral Producers”. It is the STREAMLINED PERMITTING that you need to focus in on. A permitted operational site is worth a lot more than a yet to be permitted operational site.
A “Small Mineral Producer” is one that voluntarily agrees to initially mine no more than 1,000 tonnes per month from any one adit. In a sense, the “small producers” are put on “probation” until they prove themselves to the mining authorities that they are acting in an environmentally responsible fashion.
With this new statute in effect, you might be able to appreciate how nice it would be to be the 100% owner of an entire mining district in which there were artisanal miners mining from a LARGE NUMBER of pre-existing adits. An “adit” is basically what you think of as a “tunnel” but with only one opening to the outside whereas a “tunnel” goes through-and-through, and has 2 openings/”portals” to the outside.
The large number of pre-existing adits at the ADL made the diamond drilling of these various veins much less necessary. Auryn’s geoscientists could merely enter any of these various adits and take “channel samples” from the veins. These are much more accurate than studying tiny “core samples” from where a vein was intersected by a drill hole.
Auryn has been “mining and stockpiling” very high-grade ore since early 2023. They are on track to have 20,000 tonnes of ore mined and stockpiled by Day 1 for the commissioning of the new froth flotation plant. The current projections appear to be to commission the plant somewhere in Q-4 of 2025. There will be a “dialing-in” process to run experiments in order to determine the settings/”flow sheet” that result in the optimal “recovery rate” and “concentration factor” for the plant.
Auryn is now mining at this new “level 3” after making several recent improvements to the Antonino Adit’s portal and “access slope”. They intend to hit the 1,000 tonnes per month maximum allowable production rate (for just the Antonino Adit at level 3) in Q-4 of 2025 but remember there are 2 other adits servicing the DL2 Vein that will also be permitted to produce 1,000 TPM each. The following is what some people found confusing from the 7/15/25 update:
“In parallel, our Geology team has completed a technical plan to expand production capacity at Fortuna from 1,000 to 3,000 tons per month. This will be achieved through horizontal extensions of the existing tunnel network, accessing nearby vein systems and ore from the upper level historically referred to as Fortuna 1913. It is important to clarify that these extensions do not involve vertical mining or structural changes to the historic mining layout.
To execute this expansion, we will apply for a new exploitation permit in addition to the current one already in place for Fortuna. We anticipate submitting the permit application in the coming weeks and expect approval by the end of 2025. Until then, operations at Fortuna will continue under the existing authorization at 1,000 tons per month.”
It should be clarified that this “expanded production” from 1,000 to 3,000 tonnes per month is all occurring in the DL2 Vein and “nearby vein systems”. There is an “existing tunnel network” as well as access adits already in place at levels 1 and 2 of the DL2 Mine. Management is trying to emphasize that there is no “vertical mining” (involving expensive new vertical shafts from level 3 upwards). The “Fortuna 1,913” reference appears to be near level 2, whose elevation I have pegged at about 1,915 masl.
You might remember that just to the west of the intersection point of the Antonino Adit and the DL2 Vein (at the center of the watch dial), there are what management refers to as 2 “monster veins”, each of which measures over 2-meters in width AT SURFACE. Note that the veins at the ADL Mining District are widening with depth as well as becoming richer with depth. It is not clear as to whether management’s phraseology “accessing nearby vein systems” is referring to one or both of these “monster veins”.
When management successfully intersected the DL2 Vein via the Antonino Adit, their primary purpose was to turn to the right (NNW) and to the left (SSE) in order to exploit the DL2 Vein ore in opposite directions. They did, however, mention that they were also going to extend the Antonino Adit straight ahead (to the SSW) in search of these 2 “monster veins”. I believe these 2 veins are referred to as the “Don Enrique” and “Don Leopoldo”.
The requests for the permits needed to increase production from 1,000 TPM to 3,000 TPM at the DL2 Vein, were to be submitted “in the coming weeks” from the 7/15/25 date of the update. I’m assuming they have already been filed, and we are now awaiting approval “by the end of 2025”. I don’t know this to be a fact, but based on prior permitting approvals, I’m going to guess that Auryn might be producing from these 3 adits at that 3,000 TPM rate perhaps in early 2026. This is just a guess.
The update went on to say:
“Caren Project
We have submitted the required application for an exploitation permit at the Caren project with an initial production capacity of 1,000 tons per month. Once this permit is granted and operations commence, we will evaluate the feasibility of scaling Caren’s capacity based on operational data and performance. We anticipate receiving the permit in the coming weeks.” (End quote)
Note that this permit application has already been submitted. IT IS NOT IMMEDIATELY CLEAR IF THE CAREN MINE WILL BE GOING INTO PRODUCTION SOONER OR LATER THAN THE 2 NEW OPERATIONAL SITES AT THE DL2 VEIN “and nearby veins”. Nonetheless, it appears that Auryn might be producing at the rate of 4,000 TPM, from 4 operational sites/adits, sometime in early (to mid???) 2026.
You might recall that the original plan at the ADL, was to put the “Caren Mine” into production before the DL2 Mine. Auryn successfully intersected the target area at the Caren Mine by drifting what they called the “Larrissa Adit”. The Chilean permitting authority, SERNAGEOMIN, mandated that Auryn put in 3 vertical “ventilation raises” which are expensive to construct.
Soon thereafter, the plan became to put the DL2 Vein into production first, prior to the Caren Mine. The Larrissa Adit access opening (“portal”) is located on the northern downslope off of the plateau. The artisanal miners had already put in 3 adits on that northern downslope, one of which had partially caved-in. Auryn did gain access into the mountain via one of the 2 adits located above the “Larrissa Adit”.
There they discovered yet another previously constructed accessory adit, within the mountain, that they were unaware of i.e. “Adit 2A”. Their channel sampling efforts there revealed off the chart “bonanza” grades AT THE SAME ELEVATION LEVEL (ABOUT 1,840 MASL) WHERE THEY FOUND “BONANZA” GRADES AT THE DL2 VEIN CLEAR ACROSS THE PLATEAU.
The Larrissa Adit is also known as “Adit 3” off of the northern downslope from the plateau. It exists at 1,800 masl. “Adit 2” is located at 1,840 masl and “Adit 1” is located at 1,875 masl. In these areas, the “bonanza” grades, some over 100gpt gold, occurred in conjunction with “chalcedonic quartz”.
Below is a link to the 1/27/16 quarterly update from Auryn:
Update on bonanza gold grades in Caren mine, have returned over 100 g/t Au at Fortuna - Merlin system in the Altos de Lipangue project, Chile. | AURYN Mining Corporation
You can see in that cross-sectional graphic taken from Buchanan’s work (which he “stole” from Greg Corbett of NSW, Australia) how “boiling zones” tend to have not only extremely high grades but also widened vein structures. This is a very potent combination from a mineral economics point of view.
In the “Vein Textures” portion of that graphic on the right-hand side, you can see how the “chalcedonic quartz” is found within the “boiling zone” and together with the extremely high-grade ore, is pretty much diagnostic of the existence of a “boiling zone”.
“Boiling” occurs because of the rapid decrease in pressure as well as the rapid cooling rate of the metal-bearing hydrothermal fluids in these areas close to the surface. When quartz (a “silicate”) cools rapidly, there is no time for it to create those beautiful crystalline structures you’re used to seeing. What you’re left with is quartz that looks like milk, without any crystalline latticework. You can see why super high-grade quartz tends to co-exist with “milk quartz” in these “boiling zones” that experienced rapid cooling leading to “boiling” and the deposition of large amounts of gold and “milk quartz”.
WHAT DOES ALL OF THIS IMPLY?
This “Adit 2A” discovery involving “bonanza” gold grades in conjunction with chalcedonic/milk quartz, adds further credence to the thesis that Auryn is indeed operating in what is referred to as a “boiling zone”. “Boiling zones” tend to be huge. They average 300-meters in vertical width with a range of in between 50-meters and 800-meters. They are known for housing EXTREMELY HIGH-GRADE GOLD often found in conjunction with a certain “silicate” known as “chalcedonic quartz”, otherwise known as “milk quartz”, “cryptocrystalline quartz”, or “aphanitic quartz”. This is the same type of quartz that Auryn found at the DL2 Vein at the same elevation that also shared “bonanza grades”.
Gold is found in hydrothermal fluids that emanate from underlying magma chambers when their roof/”carapace” ruptures from periodic pressure build-ups. The gold travels bonded to sulfur compounds as “thiosulphate complexes” which are soluble (able to be dissolved in) in these hydrothermal fluids. In an area of lower pressure (closer to surface) where these fluids are allowed to rapidly cool and then “boil”, the energy from the “boiling” will break the bond between the sulfur and gold atoms. This causes the gold to go from a liquid to a solid and pile up in large quantities in the local area which is referred to as a “boiling zone”. It might seem counterintuitive, but these hydrothermal fluids are so hot that they need to cool in order to “boil”.
These “boiling zones” not only extend vertically for great distances they also extend laterally for great distances. The hope is that all 7 of the Main Veins at the ADL have a vertically extensive area within this overall “boiling zone”. When you look at a cross section of the mountain from west to east, the DL2 Vein is the 6th vein from the western terminus. The Merlin 1 Vein is the furthest west of the 7 veins.
It is just a thesis, but if the westernmost of the 7 Main Veins (the Merlin 1) is located in a “boiling zone” and features “bonanza” grades and chalcedonic quartz at a certain elevation, and if the vein that is located 6 veins over, to the east, is also located in the same “boiling zone” at the very same elevation, and has similar “bonanza” grades plus chalcedonic quartz, then the 4 intervening veins in between the two might have a similar endowment of extremely high-grade gold in association with “chalcedonic quartz”.
The 7 Main Veins at the ADL compose a “Vein Set”. A “Vein Set” is an accumulation of mostly parallel, “homogenous” veins that share similar grades, widths, and chemical “signatures”. We’ll know soon enough if all of the 7 Main Veins share this same extremely high-grade “boiling zone”.
DON’T FORGET THE 20,000 TONNES OF STOCKPILED ORE THAT AURYN WAS ON TRACK TO HAVE IN PLACE ON DAY 1 FOR THE COMMISSIONING OF THE FF PLANT
The new FF plant has a “nominal throughput” rating of 100 tonnes per day. This is the weight of the crushed and ground ore of a sand-like consistency, that gets “fed” into the plant on a daily basis. What comes out of the other end of the FF plant might be, let’s say, 20 tonnes of an extremely high-grade “float concentrate” and 80 tonnes of “discards” known as “tailings”.
These “discards/tailings” will be sent over to the “dry stack tailings facility” whose construction was to commence in September of 2025. Keep in mind that the FF plant will not hit its “nominal throughput” rating of 100 TPD right away. There is a “dialing-in” period in which more and more tonnage of tailings is incrementally added through time as the metallurgists determine the ideal settings for the plant.
Froth flotation plants are mainly used to process “sulfide ore”. With Auryn exploiting 7 different Main Veins, they will also likely be encountering “oxide ore” located closer to the plateau surface. What causes the “oxidation” of the ore in “oxide ore” is the oxygen dissolved in rainwater (“meteoric water”) trickling down through the rock strata.
“Oxide ore” is often processed via “gravity concentration” methodologies like centrifuges, spiral concentrators, and shaker tables. These types of ore processing methodologies will probably be housed in the same structure as the FF plant. Sometimes a batch of ore will be processed using both types of methodologies.
We do know historically that the ore from the “Merlin 1 Vein”, the westernmost of the 7 Main Veins, responded quite favorably to a “gravity concentration” methodology known as a Sepro/Falconer. The “recovery rate” was over 90%.
In regard to the FF plant, since 100 tonnes per day equates to about 3,000 tonnes per month (based on a 30-day “work month”), 3 operational sites, each producing 1,000 TPM will keep the FF plant “busy” at the “nominal throughput” level of 100 tpd. To date, Auryn has released the identities of 8 planned operational sites. This means that the “nominal throughput” of the FF plant will have to be increased through time by adding more “cells”, “banks of cells”, and “flotation columns”.
Based on a 100 TPD throughput, it should theoretically take 200 days to process that 20,000 tonnes of previously stockpiled ore. Since there is a “dialing-in” process, perhaps we should assume it might take perhaps 300 days (10 months) to process this stockpiled ore. Since Auryn is “mining and stockpiling” as we speak at this current end of Q-3 of 2025, when that 10 months of stockpile processing has been completed in perhaps Q-4 of 2026, there will be another large stockpile of ore having been built. WHAT THE STOCKPILING DID WAS TO BUY SOME TIME FOR AURYN TO GET THEIR OTHER OPERATIONAL SITES FUNCTIONING SO THAT THE FF PLANT WILL STAY “BUSY” AND CONSTANTLY GENERATE CASH FLOW ONCE COMMISSIONED.
FROM APRIL OF 2023 TO APRIL OF 2024 AURYN WAS IN “MINING AND STOCKPILING” MODE WHILE “MINING DIRECTLY FROM THE DL2 VEIN WITH MINIMAL DILUTION WITH PERCUSSION HAMMERS/JACK-LEGS” (no blasting)
This means that the GRADE of that initially stockpiled ore is likely to be higher than that recovered when blasting is involved. We don’t know what percentage of the 20,000 tonnes of stockpiled ore was mined in that fashion, however. In their 10/30/24 quarterly update, Auryn stated that the “experimental batch” containing 2,200 pounds of ore, which was sent to the Enami smelting facility, came back with assay grades of 57 gpt gold, 978 gpt silver, and 3.23% copper. This represents an average grade of 70 gpt “gold equivalent”. For reference purposes, the average grade being mined today at similar underground “narrow vein” operations is 4.18 gpt gold.
This update also stated that this 70 gpt “gold equivalent” grade should “provide a solid baseline for grade expectations of the DL2 vein ore” if, if, if the ore is mined “directly from the vein with minimal dilution from the surrounding wall rock” i.e. via percussion hammers without blasting. The same update stated that when blasting is involved, it would be safer to assume that the “head grade” of the ore delivered to the mill would average “at least 10 gpt gold”.
WHY DOES ANY OF THIS MATTER?
In order to engage in modeling potential earnings for Auryn, we need to get a feel for how the PRODUCTION RATE is likely to ramp up over time. There are 2 PRODUCTION RATES that need to be kept in mind. There is the PRODUCTION RATE of the raw ore coming out of the adits (which the new statute deals with) and then there is the PRODUCTION RATE for the extremely high-grade “float concentrate” that is the product of the FF plant. It is the “float concentrate” (FC) that will be sold to an offtake partner like Glencore or Trafigura.
A VERY TIMELY SMELTER CRISIS
The “float concentrate” is usually destined for a “smelter” and then a “refinery”. Historically, smelters would charge in between $85 and $100 per tonne in the form of “treatment charges” (T/Cs) and “refining charges” (R/Cs). China just built many billions of dollars-worth of brand-new, high-tech smelters. The problem for them is that there is currently a huge worldwide shortage of the material that Auryn will be producing i.e. a “float concentrate”.
This imbalance between the supply of smelting capacity and availability of “float concentrate” has led to smelting and refining charges approaching ZERO and sometimes actually going “negative”. It costs a lot of money to shut down and “mothball” a smelter. Sometimes it is preferable to actually lose money on processing “float concentrate” essentially for free rather than to mothball a smelting facility and dismiss all of the workers.
For Auryn, this is a very fortuitous time to be producing a very high-grade “float concentrate”. The imbalance between supply and demand is supposed to be getting even worse over the next couple of years. The “offtakers” of the world that buy “float concentrate” from producers like Auryn (behemoths like Glencore and Trafigura), are aggressively approaching the producers of “float concentrate” and trying to get them to enter into long-term “offtake agreements” with very favorable terms. The problem for them is that most of the few producers of a “float concentrate” are already tied up in long-term “offtake agreements” with others.
What shareholders and prospective investors would like to be able to envision is a graph of these “PRODUCTION RATES” as a function of time. The ramping up of PRODUCTION RATES is fairly straight forward in this industry. Operational “bottlenecks” are diagnosed and then addressed. We also need to keep an eye on the “recovery rate” of the FF plant and study if it improves over time.
As noted, Auryn has already listed out 8 sites that they intend to commence operations at. Some of these might contain “oxide” ore that might be more amenable to “gravity concentration modalities” like centrifuges, spiral concentrators, and shaker tables. “Froth flotation” is almost exclusively used for “sulphide ores” which are found below the “oxide zone”.
REGARDING THE RECENT VIDEOS AND STILL PHOTOS POSTED ON “X/TWITTER”
At the link below you can see the contents of the 10/22/24 Auryn quarterly update:
October 2024 – Shareholder Update | AURYN Mining Corporation
You might try to mentally superimpose the graphic representation of Auryn’s new FF plant seen at the end of the quarterly update, with the recent videos and still photos. The graphic representation suggests that the new FF plant will have a mild “stair-stepping” effect wherein the crushed and ground ore will go into a “hopper” that sits above a bunch of FF “cells” the size of a 5-gallon bucket. In the videos and still photos on “X” that “stair-step” is in reality a gigantic cliff and the 5-gallon buckets are large metal cylinders.
I believe that the area on the videos up high where the “roller” is packing the crushed rock prior to the concrete being placed on it, corresponds to the area where that “hopper” will be located. At the base of the cliff will be the various FF “cells”, “banks of cells”, and “flotation columns” sitting on a concrete pad.
kids are now 17. Les Price told me their college funds would be paid off before they even left the hospital that morning.
. Keep checking in hopefully we’re getting there….
