Interesting find Mike…
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Thanks Mike,
That is an interesting observation. The “water-predator” narrative is common in Chilean activism, especially from groups like the Asamblea por el Agua del Guasco Alto. Auryn has largely avoided the major activist backlash seen by lithium giants by operating as a “small-scale miner” and implementing high-efficiency water recycling.
EM
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There’s that reference to the "“sweet spot”, (wonder who planted that into your head). There’s no doubt that this stage (post exploration and development, entering production) can be a lucrative period for the vast majority of companies and investors. However, leaning on the Lassonde Curve for comparative analysis is a bit laughable if the company in question never checked the prerequisite boxes (exploration, development) to reach this “sweet spot.” To reiterate, Maurizio could have kicked off construction of a CIL for the Caren 8 years ago. I’m not questioning his decision to take the risk to spend a few million for a small plant that can process material as it is identified and mined but there seems to be a giant leap from what is actually happening on the ground and the expectations being set on this forum. A range of ounces once the mining is well underway is a reasonable expectation. Guidance for earnings, in the absense of any visbility on volume and grade (no resource nor mine plan based on previously identified mineralization) is not reasonable.
As I pointed out, AUMC has not even provided financials that would allow any “normal/sophisticated” investor with information to make this opportunity investable. At the same time, the usual cast of characters are referecing price targets, in the billions, based on industry standard price to earnings ratios.
Perspectives will evolve as reality and time unfold.
FWIW, we are now past my “worst case” prediction for timing of reaching production. Remember when I was slammed for predicting that there would not be production until 2026. Even the “Wizard” laughed off my timeline and replied with “see you in July”. Unfortunately, he was referencing July of 2025.
Perspectives evolving.
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This past Friday I got copied on a paper put out by the Payne Institute at the University of Colorado, School of Mining. It’s an exhaustive summary of “Small Scale Mining” in Chile made in a policy-relevant fashion. You might remember a couple of years ago in a post I put out on “THEMININGPLAY” that Chile put in some new legislation (“Law No. 19.719”) carving out some special laws for the Artisanal Small-Scale Miners (“ASM”) in Chile.
In a nutshell, if a miner voluntarily agrees to limit its production efforts to 1,000 Tonnes per month per operational site, the Chilean Government promises to decrease your taxes and streamline your permitting procedures. The idea is to attract more “Auryn-type” miners from especially the U.S., Canada, and Australia. The government didn’t like how the mega-miners like CODELCO were tying down all kinds of mining concessions and then sitting on their hands and refusing to promptly develop them. So, they increased taxes and fees for the big boys and lessened them for the little guys. “ENAMI” is heavily involved in protecting the smaller miners.
The artisanal miners that were mining Auryn’s DL2 Vein (then called the “Fortuna Centro Vein”) were working with a group of bankers called “CCM” (Credito Caja de Minera) which later morphed into “ENAMI” after merging with a certain “Fundicion”. CCM and ENAMI bankrolled the ADL’s artisanal miners including the Guerrero family, etc. They would send up a team of geoscientists and mining engineers every couple of years when the artisanal miners needed money.
Throughout the years, CCM’s geoscientists and engineers would estimate the number of ounces of MINERAL RESERVES/MINERAL RESOURCES present at the DL2 Vein and then they’d cut another check. From 1940 to 1970, the artisanal miners mined a 350-meter stretch of the DL2 Vein’s 1,000-meter strike length, down to the 100-meter depth level of the vein’s known 700-meter depth. Between the “HISTORICAL PRODUCTION RESULTS” of the artisanal miners and CCM’s/ENAMI’S independent sampling and assay records, as well as Auryn’s massive trench sampling program completed in 2015, you can see why Auryn didn’t feel the need to fully drill out the DL2 Vein prior to putting it into production. CCM’s/ENAMI’S records show that the artisanal miners at the ADL averaged a robust 64 gpt gold over those years. Admittedly it was a bit of a “mom and pop” operation and the tonnage mined was only about 2,000 Tonnes. The artisanal miners experimented with an extremely crude flotation plant in 1970 and got their average up to 92 gpt gold.
The “HISTORICAL PRODUCTION RECORDS” for that 30-year timeframe are important to appreciate because of the strike length and depth of the ore that was totally removed and sent in to ENAMI. The artisanal miners, representing 3 or 4 families of miners, were mining from levels 0,1, and 2. When Auryn intersected the DL2 Vein at the new “Level 3”, the grades obtained in the first grouping of 4 separate channel samples averaged 164 gpt gold. Both Richard Sillitoe and Rob Cinits had already warned us that BOTH the AVERAGE GRADES and the VEIN WIDTHS were increasing nicely with depth. A second channel sample grouping was done and they averaged 150 gpt gold. This was the vein material itself being assayed and not the surrounding less well-mineralized granodiorite wall rock.
Auryn decided to send in a much larger sample, 2,200 pounds or 1 Metric Tonne, to Enami for a smelter test. It came back at 57 gpt gold, 983 gpt silver, and 3.23% copper. This averages a “gold equivalent” grade of 70 gpt. As a benchmark, the average grade being mined today, worldwide, in similar “narrow vein” deposits is 4.18 gpt gold. Auryn decided to get a “second opinion” from the smelting facilities at the Plenge Lab in Lima, Peru. They sourced this ore from the same area as the ENAMI sample. The Plenge Lab tested for gold only and the average gold grade came in at 128 gpt gold versus 57 gpt gold from ENAMI. Auryn’s BOD unanimously agreed to NOT send ore to ENAMI and to build their own froth flotation processing plant.
In their 10/30/24 quarterly update, Auryn management said the following:
"Laboratory Testing and Grade Expectations
AURYN recently submitted an experimental batch from the DL2 Vein to Enami’s smelting facilities, which returned promising results, showing 57 grams per tonne (gpt) of gold, 978 gpt of silver, and 3.23% copper in a one-tonne sample. This sample represents vein ore with minimal dilution, PROVIDING A SOLID BASELINE FOR GRADE EXPECTATIONS (emphasis added). While mining grades may vary due to natural dilution factors, we anticipate achieving a plant head grade of at least 10 gpt on average as we advance the project."
Auryn had been successfully mining ore in a fashion that involved using jack leg drills “WITH MINIMAL DILUTION” from the wall rock i.e. using more of a “surgical” approach. This “surgical” approach lasted at least 9 months and the ore mined was stockpiled at surface. We don’t have the exact tonnage of this ore which was averaging about 70 gpt. We do know that there is over 60,000 Tonnes stockpiled to date but we don’t know what percentage was removed “surgically” and what percentage was removed using blasting. I, for one, want to see how conservative that “AT LEAST 10 GPT” average head-grade (grade of ore sent to the mill) assessment was. With gold trading at about $4,700 per ounce, even a mining operation doing only 100 Tonnes per day (the nominal throughput level of Auryn’s FF plant after the “tuning up” process) is going to make some serious money.
The link to the Payne Institute paper is:
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BE,
This is pure fantasy. You and I both know the possibility of constructing a CIL plant in 2018 was exactly zero. A CIL plant is significantly more expensive than simple gravity or flotation systems because it requires cyanide-handling tanks, activated carbon circuits, and gold-room refineries. In order to build a CIL plant in Chile at that time, a developer had to pass through the SEIA (Sistema de Evaluación de Impacto Ambiental). Approval often took 2+ years.
I have to wonder what’s planted in your head! Why do you persist on spewing your nonsense on this thread? Your hindsight is impeccable! Have you ever considered contributing some positive contributions on one of the other stock or chart forums available here? I suggest you find a better use of your time by showing some alternative stock picks and interest a wider audience. Use one of the other forum threads here. Showing more lucrative stocks to some investors here might actually be appreciated and provide an opportunity to increase individual wealth while investors are in a wait and see mode here. If you are such a knowledgeable and successful investor, and I know you are, this will be very easy for you. Over the years I have suggested stocks like Skeena Resources, K92 Mining, CLHRF Coral Gold Resources (which was acquired by Sandstorm and now is included in RGLD Royalty portfolio), Karora (now acquired by Westgold Resources), Avino Silver, Banyon Gold, Osisko Royalty and quite a few other early picks from years ago on other forum threads. All have appreciated quite nicely. While up until now you delight in the negative aspect of your previous failed investment here. What do you actually have to show in a positive way to increase investors’ wealth for each of us? Many of the aforementioned stocks did not have “financials that would allow any “normal/sophisticated” investor with information to make this opportunity investable” at the time they were mentioned. I don’t consider myself as any “normal/sophisticated” investor, however, I do seem to do okay. Shareholders here realize the speculative nature of AUMC has evolved through the years and the risk that is associated with a stock that is bootstrapping a project. Apparently, you were and continue to be unaware that shareholders here each have a reason for being here. It may not be the same as yours. My reason is not so that you can continue beating your dead horse narrative aligned against this stock, against me, or any other individual investor here. So please back off and lighten up. You totally fail to amuse me.
EM
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I seem to have hit an emotional nerve. Never a good sign. In fact, every one of the names you mentioned were, in fact, investable. While they varied in risk profile, they all had a resource and issued transparent financials. I didn’t realize that the price of admission on discussing AUMC was offering up other “stock tips” on another forum that nobody reads but I’ve thrown around a few names that have had good outcomes.
To clarify my earlier point: a “production decision” could have been made at Caren or DL at any time over the ten years since Maurizio “acquired” the assets. If the decision is being made on flimsy historical results those have not changed. Yes, the price of gold helps but pretending that Enami wasn’t the right route because they weren’t getting a fair price and the ore was refractory (lol) is just smoke and mirrors. There never was an exploration nor development phase. The blended grades of both projects coupled with the transportation costs made the Enami option non viable (non economic). This is not speculation.
HOWEVER, following the decision to build their own plant, the price of gold has appreciated significantly. My guess is that shipping to Enami at this point/price would generate a nice profit but since they already chose a different path those profits will come through in their own processing.
I’m happy to highlight the positives along with the negatives. If anything the “positive” narratives have been beating the dead horse (unicorn?). Your intolerance of the sole voice expressing an a counter viewpoint speaks volumes, regardless of it undeniably being right more often than it’s been wrong.
Well, not exactly, however thanks for your recognition that these were all in fact investable. I have done exceedingly well with those and others that some here have been kind enough to mention. To reiterate and attempt to clarify that Maurizio could have kicked off construction of a CIL plant 8 years ago is pure fantasy, or confusion on your part. It does not even pass the smell test for spin. I think you have that confused with 350tpd CIL plant from your Peruvian plant, you are apparently on the BOD of, and have tried to promote from time to time. (see Auryn/Medinah 2025 2nd half General Discussion - #235 by Baldy ). You posted the photos of the CIL plant and tried to compare it to AUMC’s 100t pd plant. I forgot, … what was the name of that company?
EM
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Its indeed somewhat insane that some folks are talking about earning forecasts when this number has gotten to this level. Not to mention that there has been zero disclosure on the details of the $4M debt financing nor the massive “service contract” (previously dividends) and how that amount will be amortized and/or deducted from the financials. The clear positive spin would be that Maurizio has poured a ton of money into this thing. I have no doubt that he plans to pay himself back with the first $16M of earnings, pro rata with the debt/“service agreement”.
Allocating an additional $4M in the last quarter of 2025? They are either way over budget on the plant or mining pretty aggressively.
March 2021 $1.2M
March 2022 $2.6M
June 2022 $2.9M
Sept 2022 $3.2M
Dec 2022 $3.7M
March 2023 $4M
June 2023 $4.6M
Sept 2023 $4.9M
Dec 2023 $5.1M
March 2024 $5.3M
June 2024 $5.6M
Sept 2024 $6.8M
Dec 2024 $7.6M
March $9.9M
June $10.3M
Sept $12.7M
Dec $16M
So you do or don’t want me to mention (promote stocks)? Its very confusing. Do you think this would be the right forum to try to generate interest (promote) a stock? Folks are calling for a a easy 20 bagger with AUMC and the stock trades less than a thousand shares most days. Talk about a waste of time. Not to steal your thunder but pretty much any mining stock (with the exception of AUMC) has gone up 5x over the past several years. A monkey throwing darts would have had a nice success rate given the moves in the underlying metals (gold/silver). I happen to be one of those monkies but at least I’m smart enough to admit the same.
If you want to highlight what has been acheived over the past seven years that faciliated a production decision today, that could not have been made 8 years ago (with the exception of the POG) I’m all ears. The references to grade are almost comicial. Is this what you consider the “exploration” or “development” phase? Some trench samples? Two years to find the DL vein. 2000 tonnes of material mined over 30 years!! You do realize that the only material that was ever tested for grade was the shiny stuff. They didn’t bring “blended material” down the mountain and any reference to grades over that period is, candidly, embarassing. As are references to grades on material taken directly from the vein. The reason why Maurizio didn’t send material to Enami to mint money and pay for the plant is because he knew/knows (and has stated publicly) that the average, blended grade is, hopefully, 10gpt+. Using this grade the transportation costs, plus tolling fees, made this option unattractive (as it was for Caren). Building a plant was the only option from day one. Please let me know if anything I have stated above is questionable.
Specific to the stock being uninvestable. You have a third party that is owed $16M, a debt facility with no disclosed terms and a mining/service contract with an operator that is world reknowned for being a ruthless partner. Investors have no idea how much of the pie they will extract. Without a resource you are chasing a vein. It could be a bonanza until infinity or hitting a brick wall. Most likely starts an stops with intermittant periods of cash flow. Establishing a mine life which is a necessity for any DCF/NPV/PE valuation is impossible. There is simply no way to forecast nor model this type of operation. Please let me know if anything I have stated above is questionable.
I’m not overplaying the skeptic card. It may seem that way b/c some of the more euphoric analysis presented here is so extreme and, as in the past, will be proven to be so. This does NOT mean that there isn’t an investment opportunity here. I don’t feel like I’m wasting my time but, at the same time, am more than happy to be patient to wait for proper disclosure, a little bit of execution, and a reasonable entry point. None of the above are anywhere near where they need to be today.
Yes, show us how well you are doing with your own book, but do in the space that has been provided for it. It’s not confusing at all. In case you didn’t know, Other current mining stocks, FWIW - Focus on Global Economy*, or start your own thread since for the past 8 years or more you have only promoted how smart you are! 
EM
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