The Mining Play

Medinah/Auryn - 2018 Q4 General Discussion


#21

Bubba. I can’t believe I’m typing this but I’m in full agreement. A binding LOI is no different than an engagement proposal. No real money will ever be committed/spent until an executed JV is in place (or marriage). As GCC correctly opines, the work being done is almost definitely related to further due diligence being conducted by Hochshild for them to determine if they want to move forward and/or the final terms to be outlined in the definitive documents. This is all part of the procedural norm.


#22

That being said, I have to say it would not surprise me if the JV Agreement had already been signed and they simply decided not to publicize it yet for some reason. It seems like we always learn about stuff that’s happened with this stock AFTER it has happened - and when they’re darned well ready to tell us and not before. I feel like a red-headed step-child when it comes to this stock.

I don’t know about you, but when I got engaged I had to spend a load of money to buy a ring - and I’m still spending money - Hahahaha!


#23

I read this as the contract is signed. It does not say further due dilligence.


#24

Simple question is the JV contract signed Yes or No?


#25

Since both parties agreed that this was to be construed as a BINDING LOI, I would assume that the phraseology in the fine print said something in regards to BINDING unless we (Hochschild) see evidence of gross misrepresentation.

If there was gross misrepresentation it would probably have been in conjunction with the assays received from the previous drill cores. This would bring in issues related to QA/QC or maybe the chain of custody of the drill cores. Not surprisingly, phase 1 of Hochschild’s attack plan is to re-log the cores and to do what’s referred to as quarter core resampling. Half of the split core already went to the lab. Hochschild will probably take half of the remaining half and send it to a different lab for corroboration. My gut would be that the signing of a formal agreement would occur after these results were obtained but who the heck knows. They may also want to recheck the areas where Gordon House and later the Nuoco geoscientists did “channel sampling” especially the areas that revealed the presence of the “high octane” forms of copper i.e. chalcocite, bornite and malachite. These areas would remain labeled in the two adits and could be resampled very quickly.

Hochschild’s BOD needs to protect their shareholders from misrepresentation. From AMC’s point of view they are no doubt giving Hochschild EXCLUSIVITY during this timeframe and they are forbidden from “shopping” the LDM deal to others during this time period which AMC doesn’t want to last too long. The BINDING LOI covers everybody’s butts in the intermediate timeframe.

ACA Howe already performed a “quarter core resampling” of the LDM core segments that showed the highest gold grades. Their results were even higher than what Medinah’s P. Geo. Gordon House got. This still doesn’t rule out the “Nugget effect” which means that the sampling might not be reproducible because the sampling happened to involve ore of a nuggety nature and right next door might have been barren ore that was not part of the sample.

What makes this all interesting is that these “Lacustrine sediment hosted stratabound deposits” usually don’t have much gold and often silver is the byproduct metal. But these “Lacustrine sediment hosted stratabound deposits” are famous for having epithermal gold veins nearby.

The Andacollo Mining District then jumps out at you because they ran into the same situation wherein the gold grades were just too high for that type of deposit setting. Sure enough Dr. Jannas ran the molybdenite at the ADL for RE/Os dating and bingo it came back as the same age as the Andacollo i.e. 92 million years old. Hochschild’s CEO Ignacio Bustamante made a comment to a reporter about the INTERESTING GEOLOGICAL POTENTIAL of the LDM. I’m assuming he’s referring to some of these facts but again who the heck knows. Our hope would be that the LDM subdivision of the ADL ends up being a nice “oddball deposit” just like the Andacollo. The Andacollo deposit has been studied to death by none other than Dick Sillitoe who is calling the shots at the ADL. Hochschild is following the Sillitoe plan at the LDM.


#26

Looks like they posted some more pictures of Phase 1 work.

https://aurynminingcorp.com/gallery/


#27

Very very good!!!


#28

By the way, if it was you who helped get the website fixes done that I suggested…thank you! As you know, websites/content matters. It is important to get the message out especially as activity finally starts to ramp up on the mountain again.


#29

Yes, thanks Kevin for having the outdated CDCH links addressed and fixing the error message; they now link correctly to AUMC info on the AURYN Mining Corporation website. Also, thank you MG … for originally pointing out that problem. I’m sure management has a lot going on and appreciated hearing of their oversight.

Good to hear activity on the mountain is progressing.
From the LOI:

An aggressive work plan is scheduled to take place and the short-term goal is to have the property ready for drilling to begin in early 2019.
https://www.otcmarkets.com/stock/AUMC/news/AURYN-Mining-Corporation-Signs-Binding-LOI-with-Hochschild-Mining-PLC?id=201679

Regarding questions as to what a binding LOI entails:

If no party disagrees that it intended to be bound and the LOI has a minimum amount of information (classically, but not necessarily in the modern contract world, it identifies the parties, the subject matter of the agreement, and the essential terms, generally price), the battle shifts from whether the LOI is enforceable as written or whether there has been a breach, and if so, what the remedies will be.

Enforceability is only an issue when one party insists it didn’t intend to be bound, because if all parties take that same position, the question of enforceability doesn’t come up in the first place.
https://www.americanbar.org/content/dam/aba/publishing/rpte_ereport/2012/4_august/rp_meislik.pdf

The LOI announcement provided a great deal of specificity:

This LOI gives Hochschild the option to invest US$7,000,000.00 into the LDM project over a 5-year period to earn a 51% joint venture interest in the LDM properties. An option to invest an additional US$23,000,000.00 is available to Hochschild to gain an additional 9% interest. If all US$30,000,000.00 is invested, Hochschild will own 60% of the LDM project with AURYN holding the remaining 40% as a joint venture partner. The LOI is subject to further due diligence and the signing of a definitive agreement.

I expect 2019 will be a good year on the mountain.


#30

Did MDMN change ticker symbol or just no activity the last two days?


#31

No activity.


#32

Lol, Thanks to whomever sold the 500 shares, I know it was just a test to make sure the stock is still trading… I was thinking about that myself…


#33

Rick Rule is a very knowable dude, hopefully timing is on our side for once :wink:
“Twenty years of underinvestment and malinvestment in exploration,” Rule explained, “has [created] a circumstance where major, mid-tier, and intermediate mining companies, are now crowding back into the exploration space, after having laid off their exploration staffs.”

“I was [recently] at a party given by a very famous mining entrepreneur,” Rule proclaimed, “and the CEO of a major mining company … came across the room to where I was sitting and sat down next to me and said, ‘Rick, you have me right where you want me – the board has said we need to increase emphasis on exploration but we’ve de-emphasized exploration for [the last] 10 years – our pipeline is empty and we’re understaffed.’”

“That [discussion was] the best endorsement for prospect generation that could possibly be given,” Rule stated.

At a time of increasing demand for high-quality deposits, the equity side of the exploration market is, “Unknown, unloved, unwanted – perfect,” Rule noted.

“The setup in prospect generators is probably the best in my career … Most people don’t know what they are … so there’s no competition from most investors. Investment bankers hate them [prospect generators] because they raise money from other mining companies rather than through written [bank] offerings.

“So there’s no research from the sell-side because they never get to do any underwritings to support them,” Rule added.

As a final comment Rule noted that, “All of a sudden, the prospect generators, which are unknown and unloved, have customers flocking to them. A circumstance where your business gets better and better, and your share price gets worse and worse – is a speculator’s dream. And that’s the circumstance that confronts us right now.”


#34

Does anybody know what the numbers on those core boxes are referencing?


#35

It is just simply the identification number that was used for the particular hole that was drilled during previous drilling campaigns at the Dos Marias and the depth in meters below the surface the core corresponds to.


#36

What will it take to be trading closer to .005 than .003? Isn’t that where we are “supposed” to be trading?


#37

I believe the closer we get to December the narrower the gap between AUMC and MDMN price on a converted stock basis. I was hoping that MDMN would come up to meet the AUMC price but it looks like the other way around that AUMC is closing in on MDMN price. They will probably meet in the middle but based on today’s prices it looks like AUMC is moving closer to MDMN. Just an observation.


#38

I thought so too Karl, I thought that the high twenty’s to lower thirties ( ahem " buying opportunities") were starting to fade… Surprise.
I would think that a few new updates on the samples and a statement that Hochschild is going forward would bring this up a tad…


#39

After reading last update I’m not expecting anything from Auryn until December maybe even Jan except maybe a Merry Xmas (wow where did the year go) so at this time I’m just holding my position and working with some good gains from my Cannabis stocks and start my buying again year end. Anybody else with the same thoughts?


#40

Maybe. Should get some photos of Phase 2 of the exploration program at the LDM at the minimum prior to that time I suppose. (Doesn’t really say what Phase 2 is but I would thik it would involve some geophysical type work IP’s etc.) Perhaps Phase 2 will lead to a completed JV announcement?

We also have this at the end of the month:

http://www.gfcmediagroup.com/mining-and-investment-latam/agenda

Possibly get a few photos out of that. More importantly, perhaps a JV or financing will come out of it for the rest of the property as that appears to be the purpose of Dante presentation?

Probably should keep an eye of the Masglas/Western Troy transaction:

Some sort of final meeting is suppose to take place around the end of October.(It doesn’t appear that all the required milestones have been done yet like the 43-101 report so perhaps this will get pushed back further.) Speculating here…there remains some possibility that having Masglas go public is required by a potential JV partner for the rest of the Alto for complete transparency of all the companies involved or some other reason.

Around December 15, the 12 month hold on the shares will go away. Almost for sure, Auryn will start releasing lots of news (if there is any good news) in attempt to provide some liquidity as I’m sure they intent to sell some shares to raise some money to at least pay some bills.