The Mining Play

Medinah Minerals (MDMN) - 2015 Q4 - General Discussion

I believe they completed a few drill holes at the Merlin just prior to the holidays and will restart in early January. They probably only have some of the assays back on those or perhaps none at all. They will be critical to show what actual grades we should expect when they start producing.

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Mike,

Thanks for info on drill holes. I take it the holes were quite shallow. Any idea of depth?

Do you know the depth at the Fortuna mine where the grades of the rock became impressive? Was it right at surface or a few meters down?

Hi Whatever,

What we do know about the Fortuna Vein is that it averaged 64 gpt gold while in production from 1940 to 1970. I believe the mine had 7 different levels. ACA Howe says that they haven’t scratched the surface yet on the FV. The IP/CSAMT suggest that the structures go to about perhaps 300 meters of depth. Now it looks like the FV did cross the border onto Medinah’s Lo Amarillo concessions and they’re calling the extension to the NW “Fortuna Norte”.

I believe a couple of months ago AMC got permission to do another 19 drill pads. The most recent power point presentation suggested the Merlin-Fortuna area was going to have 1,800 to 2,000 meters of drilling in the near term. I’m thinking these are going to be fairly shallow and go until they intersect the targeted veins. Then I’d guess they can take that information and quickly toss it into the NI 43-101 which earlier indications suggested would be done in the Feb. to March timeframe. These NI 43-101 “F-1 technical reports” are constantly being “amended” and added to. My guess is that they want to crank out a quick one to keep the TSX.V or TSX happy if they are indeed going public ASAP.

@TradeRich, @Karl, @Hurricane_Rick and any other technicians . . . is a bottom in and a reversal afoot.

Funny you ask, I was just looking at the charts this morning and just did not want to say anything only because every time I do it seems to stall and reverse itself. But since you asked, on the daily charts the MACD actually turned positive around December 14 . Today we received further confirmation when the 5 day EMA crossed the 20 day EMA to the positive side on the daily charts, which has not been positive since Oct 14.

The weekly charts also look like they are finally starting to turn. A close at or above .02 should be all it takes to confirm the bottom is in on the weekly charts. It sure looks like we might be on the right track, especially if we get the weekly confirmation with a close around .02. JMO

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I’m trying to reconcile your post above with this comment earlier. Whats wrong with, “I heard Auryn is coming into the market soon. Perhaps as early as Wednesday or Thursday”. Lot less risk that way.

PS - Just messing with ya :wink:

Nothing confirmed from my POV yet. We moved up to the 50 MA on the daily and have been pulling back since. We need a close above .02 and then confirmed support before I would call a bottom. I’ve been using the old forum for playing with some charts. I’ll update MDMN when I see a reason to do so. I’ll post MDMN charts there this afternoon/tonight when I have time.

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.03 minimum by mid Jan and no hedging like lean with probably or should reach. A lot to go after that but at least we will be on a positive path.

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Auryn has no sympathy for mdmn shareholders but drop in mdmn share price has been so excessive that it is frightening their backers fiancers and supporters. Look for some positive developments in January

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Your developing some credibility here.

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Any thoughts on the cutoff grade they are using? I’ve never seen a number that low be considered “economic” for open pit mining (I realize these are surface samples but still find it curiously low unless I’m missing something…which happens often).

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A few random ones, not necessarily worth a lot:

  1. what Auryn stated was:

In the mineralized calculations the cut-off grade considered to build is >0.1 g/t Au.

  1. First, it is odd (and I think unnecessary) to express a cut-off when you are just presenting raw assay values from drill bores or channel samples or whatever. Nothing is being implied by such a report other than it is “anomalous”. There is no “economic” judgement when you just report numbers other than the suggestion it is greater than random background value. For those who are not familiar, here is a recent Pretium report on some low-grade gold zone drilling: http://www.pretivm.com/news/news-details/2015/Pretium-Resources-Inc-Brucejack-2015-Regional-Drill-Program-Complete/default.aspx No mention of any ‘cut-off’ in a report like that.

  2. Again for those not familiar, when you do a resource calculation then you need to include what your “cut off” value is which you used to determine what is “ore” to be processed and what is “waste” rock. Readers of such a report use that number to judge the quality of the resource you are claiming.

  3. So, aside from the number just the fact that they mention “cut off” at all and actually use the word “build” definitely stands out and clearly implies they are thinking in terms of a resource calculation (43-101 or equiv.), and an actual open pit mine build out. So I think that at least validates several rumors, at least in part.

  4. The number “0.1 g/t” is very low imo even given the very low potential startup costs and mining costs for this near surface stuff. I don’t read endless amounts of these reports but a fair number. In 2015 I saw one report with a 0.3 g/t cutoff and another with cut-off just above 0.2 g/t. I think even Todd Hoffman operating nothing more than a dozer, excavator and wash plant mining in the top 10m of his property would have trouble making money at 0.1 g/t. That’s only about $3.50 of gold per tonne.

  5. I know I keep coming back to this subject area, but the only other thing I could think of is that gold is performing better in EM currencies than in dollars. I know gold in CAD for example is up 15%+ in the last year. I haven’t tried to figure it out, but maybe between that and very low operating costs it helps them push cut off lower. But 0.1 g /t still seems too low.

Maybe they won’t stick with that number going forward. Or I suppose its possible that sentence does not mean what it seems to mean. But I don’t know what else it would mean.

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[quote=“cornhuskergold, post:37, topic:704”]
That’s only about $3.50 of gold per tonne.
[/quote]Must be AURYN is counting on gold to triple in price before the “build” :wink:
Previously, Todd has used $10/ton minimum for running any dirt! :scream:
As usual, CHG, you are right on in your analysis/comments.

A good basic reference for defining the dilution problem is presented here:

INTRODUCTION
Uncertainty and risk are inherent characteristics of mining projects. This is due to uncertainty in market conditions,resource models,and mining factors such as tonnages, grades and dilution. To reduce the risk of investment, mining companies dedicate a large amount of time and money during studies to estimate grades and tonnages as well as measuring the mining conditions and costs. Due to difficulties in measuring some of the important design parameters such as dilution, still there are factors that can be overlooked. With a holistic approach to design a mine that includes quantifying dilution in early stages of work, a good mining study will reduce the risk of investment and operation…
QUANTIFYING DILUTION IN OPEN PIT MINES
Computer programs have changed the way we design mines.There is a large amount of commercial software readily available in the market. Most can handle the methodology described in this paper. This methodology can be used to quantify dilution in existing operations as well as for studies.When working on a mining project it is necessary for the designer to keep in mind that every mining project is different. It is difficult if not impossible to formulate a generic solution that can be applied for all mining projects. Every deposit has its unique characteristics and must be dealt with differently. We need to be creative, ingenious and practical in using tools to solve mining problems.The following section explains the steps that can be taken to quantify dilution in open pit mines.
CONCLUSIONS
Using assumed dilution factors may bring unexpected results to mining projects when brought to operation. With all the developments that have occurred in mining software technology today it is time to make sure that every mining study includes enough time and budget to quantify dilution factor. The methodology described in this article provides a methodology that can be utilized in open pit mining studies. It can be modified based on project’s specification.
The example in this article also showed that dilution factor in a single mine differs with different depths. It also showed that dilution changes by commodity price. These variations in dilution must be taken into account when designing or evaluating mines.
Author believes that a discussion must be started among experts in mining industry about how to standardize the quantification of dilution factor for mining projects. The results of this discussion can be included in future NI-43-101 amendments.

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Thanks. As context, in Australia, where gold is trading at $1500/oz most of the projects (low capex, open pit) I’m evaluating are using .5 g/t as their cutoff. FWIW

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No “wire” release on today’s news… Am I the only one upset about it, or it really does not matter…Any thoughts would be appreciated…Thanks…

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today’s news/update is not market moving…I wouldn’t lose any sleep over the lack of an official release

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