Perfect.Thanks Mike.
Obviously, CDCH eventually should also do just fine.
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Iāve been thinking that myselfā¦ I personallyā¦ believeā¦ now is the timeā¦ to add to the Cerro positionā¦ anyone thinking the sameā¦???
Unless JJ is completely out, you would do better playing Russian Roulette with one empty chamber!
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Mike, appreciate the maps, etc. However, i would tend to disagree that all Chilean govāt regs have been met. I am sure the govāt will want a Plan of Operation which will detail how and where they are going to mine, how they will be controlling air and water quality, mitigating any environmental issues, such as ensuring any animal migration is not effected, etc.
They will need a site plan for where they plan to mine, crush rocks, process ore to a concentrate. Where monitoring wells will be drilled, whether crushing the rocks generates acidā¦
JMO, they are not close to production. But then again, I donāt know Chilean mining regs. But they are moving forward.
Again, JMO they will want to drill more holes to define the resource and do pit design, etc. I am sure the govāt will want to know where they will storing the explosives, handlingā¦ All I am saying is that unlike the TV shows, there is a lot of planning that needs to be done, just not going in, blowing up rocks, hauling and processing.
Just to be clearā¦my understanding is that all necessary government work that is necessary for Auryn to go into production has now been completed. I didnāt make this up. The project may be further along than most realize.(Note: From the previous news release, Auryn āowns the exploitation permissions up to 5,000 Tn/monthā which is also suggestive that they already have received government approvals based on previously submitted mining data.) What is clear is that Auryn is going full bore towards productionā¦and why not? The whole Alto project is nothing but a money pit until they can produce a revenue stream.
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I understand MDMNHolderās comments. I have been one of those out in front pointing out that permitting, construction, etc. of any real mine using local facilities is not within the timeline of this JV/Option. I agree with him on this. I donāt think the permitting for higher tonnage is in place let alone for local facilities like a leach pad etc. Construction clearly takes 12 to 18 mos minimum for local facilities even after all those things are in place. I am with MDMNHolder on this.
But prices are so low (i.e. profit margins so small) that even small amounts of true high grade material can make a huge profit difference even to a large company. And this leads companies to makes decisions they would not have made only a few years ago.
A very recent example of what I think Auryn is doing can be seen in Hecla and their just started up San Sebastian deposit.
http://investors.hecla-mining.com/phoenix.zhtml?c=63202&p=RssLanding&cat=news&id=2128443
SUMMARY: Hecla is a large U.S. silver producer with several large North American mines. They have been around for decades and mine underground and open pit in very large operations. But in September in a rushed decision they they suddenly decided to take an older deposit they mined 10 years ago and put several new near-surface high grade veins into production at a mere 400 tonnes per day. They have to haul this ore somewhere near 100 miles to be milled and processed in a ārentedā mill. They put the property into production within 2 months and produced 75,000 oz of silver at the end of Q4.
QUESTION: Why in the world would Hecla, a major producer, rush into operation a small 400 tpd operation and haul silver ore 100 miles to be processed?
ANSWER: because they could do it quickly with small capital outlay (< $6M for the rented mill) and the silver is of such high grade (tens of ounces per tonne) that they make nice margins even hauling the ore 100 miles. Even though their other operations are much much larger, they are operating on near zero margins, that is, they make very little money at these prices. So even a small 400 tpd operation with high grade material, while adding very little to revenue, can add materially to the bottom line profit.
MORE DETAILS:
They did a resource estimate and production decision within months and before they even had a formal PEA in place. They controlled the property. They had permitting in place. They had no local facilities but they had used this ārented millā 10 years ago when they mined the property. They only have a pathetic 275 kilo-tonnes of ore formally defined!! But it is 30 Oz / tonne and very near surface. If you figure out the silver to gold equivalent is similar to 27 g / t gold in value per tonne.
They stripped. They are blowing up rock and are hauling it - 400 tpd. It only took them about 8 weeks to start mining this new vein after the decision.Their approach is to use a shallow open pit < 100m in depth. Eventually Hecla thinks this will turn into an underground operation.
I think something like this is what Auryn has in mind. It will be even shallower than 100m. It will be even lower tonnage at the start, perhaps the 5000 tonnes per month (appx. 150 tonnes per day). If they can achieve this, 25 gpt at 150 tonnes per day still represents a potential $50M / year in revenue that makes profit. If it is good enough for Hecla it is good enough for Auryn.
This is NOT the long term plan. It is not even the mid-term plan. I think it is the first step plan.
All IMO.
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Super low volumeā¦ .019 on the askā¦And no takersā¦Interestingā¦
It certainly appears production is going to start at some point
The big question is are we still going to be mdmn shareholders when it does?
Hi CHG,
I think you nailed it and part of the motivation for ultra-quick production might be to augment the prognosis for the success of any intended exchange listing. The NPV perceived by investors will be enhanced with early cash flow (less discounting) and perceived mine life (cash flow duration). These near surface high grade early production opportunities should add plenty of BOTH. I have a feeling that the $100 million minimum cash portion of the purchase price will not be such a daunting figure when you relate it to the number of months needed to cover it when you get 85% of the action on these early production opportunities.
I sense that the presence of the early production opportunities is going to be the prime determinant of the timing of the ADL option exercising. Iād exercise it as the first truckload of concentrate heads down the hill. Thereās a big difference between 0% and 85% of the action.
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Iām guessing Doc is facing a bit of a conundrum. The only people heās ever blamed in this investment are the evil market makers and some of the critical voices that have pointed out the seemingly obvious errors of our BOD. He is also quick to point out that the typical mine cycle can take 20 years so thereās no reason to complain and every reason to be patient.
I love the discussions of early production opportunities, similar to previous discussions on the LDM and one of the reasons why we gave 80% equity to insiders for pocket change in exchange for a FCI. Here we are again, speculating on near term production opportunities on the exact same claims that MDMN was sitting on 20 year (and over a billion shares) ago. Turns out these opportunities were literally at JJās feat all of these years. Now that Auryn has spent a few bucks and built the right team to āmonetize the mountainā we stand to FINALLY make a respectable ROI. Yes, any returns will be fractional compared to what we would have seen in a better market will a billion less shares, and more than fractional ownership.
How can anybody BLAME our BOD? This is your typical mining cycle where you drill a few holes, delineate a potential WCD, and then sit on it, idly for twenty years, while issuing shares to pay bills/personal expenses, massively diluting shareholders and somehow managing to hold a static 50% along the way. All while sitting on near term production opportunities and eating finger sandwiches with Partner A, B, C (read: Ulander).
Those damn market makers are clearly to blame.
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CHG, i did some checking and you are correct, they are hauling rocks to the mill, not sure if they are doing preliminary crushing on site or not. But the high grades are certainly economic. Of course, they did have some data to go by
http://www.hecla-mining.com/operations/operations_predevelopment_sansebastian.php
30 Ozs (yes 30 ounces) per tonne, enable crazy things - esp. when oil and gas prices for hauling have fallen like they have
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[quote=ācornhuskergold, post:158, topic:766ā]
This is NOT the long term plan. It is not even the mid-term plan. I think it is the first step plan.
[/quote] If AURYN chooses just bulk sampling to start (I think you stated earlier this was code for early production), a modular plant could be up and running in as little as 3-6 months, or less, to bring hauling costs down. There are multiple economical solutions for a milling plant to start on a small scale, including renting or previously owned equipment. Many mobile (or modular) types of processing are available. You make an excellent point that lower fuel costs, presently, may make trucking a very reasonable option. An ore crusher to begin the process can be had for as little as $40K as shown here:
http://information.deomuktsar.org/products/mobile-crushing-and-gold-milling-plants.html
After exercising the JV options or a TO, AURYN could expand into full production with additional permitting, and other necessary studies later. A modular plant processing up to 2000 tpd may be what is chosen such as is shown here:
Resources Modular Gold Plants (MGP) are complete turnkey modular gold plants designed for the 500 to 2000 ton per day producer. Permitting requirements and land disturbance are minimized as a result of the inherent environmentally friendly processing technology and compact footprint of the Modular Gold Plants.
Has anything been set up, or in the planning to concentrate the old tailings, which reportedly had been found to contain 5 g/t?
Actually, you could do a full build out in 3-4 months assuming you donāt need to level alot of dirt. That would include putting in place a crusher, I would assume only one circuit is needed due to the high grade and not being polymetallic. Settling ponds, start with a 10,000 ton leach pad, that would be expandable, the processing circuit, etc. Then road improvements, at least in the US, they need to wide enough so that two haul trucks can comfortably pass each other. Total cost $4-$5 million.
But again, JMO, they need to do a lot more drilling and permitting for a leach pad is tough one.
Why canā t this stock gain any positive movement?
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