MEDINAH TIMELINE STUDY AID
From a due diligence point of view I've found it helpful to make timelines every once in a while in order to study past developments as more of a continuous movie than a series of still pictures. This way you can notice trends. To me it appears that Medinah developments went into a noticeably higher gear subsequent to Medinah's 4/20/14 Press Release updating exciting recent developments at BOTH the Nuoco copper and LDMC gold projects. April 20 of 2014 will become Day 0 of this timeline.
4/20 Day 0: THE PR THAT APPEARS TO HAVE INITIATED THE RAPID PROGRESSION OF RECENT DEVELOPMENTS
At the Nuoco copper project the geoscientists confirmed the presence of a copper porphyry structure at a shallow (very mineable) level. They found a linkage (probably via rock types and textures) to the ore contained in the Gordon pipe core samples 3.2 Km to the east at slightly higher elevation levels approximating 1,600 meters above sea level at the deepest points Medinah had drilled from the 2,000 masl plateau. The Nuoco workings are at approximately 1,350 masl.
The porphyritic material at Nuoco/Mambo contained 3 types of "high octane" copper (bornite, chalcocite and malachite) as well as the standard ("low octane") copper ore known as "chalcopyrite". The PR cited that this discovery: "may have a significant impact on our understanding of the potential scope of mineralization over the entire Altos de Lipangue claims area". [If we were to fast forward from here, the formal mine plan for the Nuoco involves going after several huge manto structures that dip to the east from the LDM and Mambo concessions straight towards the ADL and the Gordon pipe areas. The question begging to be asked is if the entire mountain features these "high octane" copper ores or are they confined to just the Nuoco area. The "chalcocite" form of copper and to a lesser extent "malachite" often indicates what is referred to as "supergene enrichment" which is a VERY highly desirable phenomenon in copper porphyry deposits.]
Meanwhile at the LDMC project, the geoscientists there found predominantly high grade gold bearing (again) "porphyritic" material near the (relatively shallow) 70 meter level of the internal vertical shaft/winze. The PR cited the decision to hire geoscientists to do a "Professional Geological Assessment" of both of these discoveries of NEAR SURFACE porphyritic material.
[These discoveries and this PR seemed to be a turning point in developments and from here on out further developments occurred very regularly and very rapidly driven by the actions of mining professionals very adept at recognizing geological structures. As non-geoscientists, I think it makes sense for us to firstly notice this turning point and then to dig deep to detect just what those well versed in this industry seemed to get so excited about. For now let's suffice it to say that porphyries are indeed typically monsters in size but sometimes they're too deep to be economic. That certainly doesn't appear to be the case here, one bullet dodged. They also typically contain low to medium grade material (mainly chalcopyrite) but sometimes they'll have relatively thick zones of "supergene enrichment" sporting certain types of "high octane" copper that can improve the economics markedly.]
4/25 Day 5: All of a sudden a written offer arrives from a group of "Peruvian expert miners" that clearly had access to directly sample and study the developments at the Nuoco and LDMC projects after access into the belly of the mountain was made. Medinah was given 44 days (until 6/9) to accept or reject the offer. The PR cited that major and mid-tier miners were still up on site and that they were aware of the recent breakthroughs at both the Nuoco and LDMC. It appeared that the developments at the Nuoco and LDMC in the "belly of the mountain" both increased the universe of potential suitors and were being used in a "show and tell" fashion with all interested mining groups.
5/12 Day 22: All of a sudden Sr. Roberto Letts joins the BOD before any choice of a partner was made despite the fact that major and mid tier firms were either still up on the mountain or perhaps busy processing their findings and samples. The question arises as to whether or not these majors and mid-tiers were already "in bed" with the Letts family as they didn't seem to mind other groups being on the mountain. [Might there be interested majors in the background with a lesser risk tolerance than the Letts family waiting on participation pending certain future results that decrease their risk?]
5/29 Day 39: In regards to the LDMC vertical shaft/winze project, the first 10 meters of the lateral development ("Level 70") coming off of the vertical shaft revealed gold grades averaging about 21 gpt Au when sampled at 2 meter intervals. The grades were getting higher as they proceeded to the NE and the nature of the rock was changing from a breccia to a gold bearing fractured quartz system with a porphyritic texture. A "full mining plan" was commissioned and a consulting engineer recommended by ENAMI was retained.
6/10 Day 50: Medinah accepts the Letts offer. Management was asked to fly to Peru and Chile on Day 63. Sr. Letts had to recuse himself as he was an affiliate of the group of "Peruvian mining experts".
6/30 Day 70: A "Binding Framework Agreement" was signed with Auryn. The Letts were given a 3 year binding option to purchase 85% of the 4,100 hectare group of ADL concessions for a minimum of $100 million. The "purchase price" would be determined by a formula containing exploration results. Medinah would retain a 15% equity interest. Auryn was to set up a wholly owned subsidiary in Chile over the next 30 days. A $3 million nonperformance/noncompliance penalty was agreed to and binding upon both parties. The BOD of this new "Auryn Mining Chile" (AMC) would be composed of Sr. Roberto Letts, his mother Irene Letts, 2 lawyers and David Bent P. Geo. of past Noranda fame who would head up the project.
7/11 Day 81: AMC was successfully incorporated. The Letts proved to Medinah the existence of a $10 million line of credit set up by the Letts at the Banco Sabadell. The official attack plan for the mountain was set to be delivered to Medinah management on or by 8/15.
7/21 Day 91: AMC finished up all of their paperwork and invited Medinah management to Chile between 7/30 and 8/5 to formally ink the deal.
7/23 Day 93: An assay from a truckload of copper heading to Til Til came in at 5.31% Cu.
7/31 Day 101: The formal signing of the JV option purchase agreement was completed in Santiago, Chile. An NI 43-101 preliminary feasibility study (PFS) deliverable to Medinah was to be part of the deal. Medinah agreed to limit any future share issuances to a total of 165 million more shares (1.5 billion total fully diluted) over the course of the entire 3 year period.
8/7 Day 108: Auryn files with Medinah a formal intent to buy shares out of the Medinah market.
8/15 Day 116: Auryn submitted their mining plan to Medinah as per their mandate. They had already initiated their program. The initial drill plan was for 8,000 meters immediately which was broken down between 6,000 meters at the Gordon pipe and 2,000 meters at Lo Amarillo. They were busy setting up an office in Lampa for drill core logging, initiating a helicopter aeromag/spectrometry survey, purchasing vehicles, surveying existing drill collars and finalizing a contract with a drilling firm. The budget for phase 1 exploration was set at $10 million with $3 million being spent initially. It was budgeted to take about $10 million to get one or more of the targets through the PFS stage.
8/29 Day 130: The official Nuoco mining plan by Diaz arrives. A "room and pillar" approach had been chosen to go after the various manto structures dipping towards the ADL and the Gordon pipe area from Nuoco 3.2 Km away. The official LDMC mining plan was due soon.
9/2 Day 143: Sr. JJ Quijano resigns his Presidency and BOD position.
9/8 Day 149: A drill contract with AC Perforaciones was signed by Auryn. The drill program is to start by Monday 9/22 after the long holiday week/weekend which is Day 163. The $3 million nonperformance/noncompliance penalty was taken off of the table as both parties fulfilled their obligations.
ADDENDUM TO MEDINAH TIMELINE STUDY AID
As an addendum to the "Medinah Timeline Study Aid" it might be prudent now to dissect the 4/20/14 "game changer" press release and try to detect what all of the excitement centered on that led to the various actions of the "Peruvian mining experts". First of all, I'm assuming that a lot of this information was conveyed from a Spanish speaking geoscientist to JJQ who then relayed (in the best English he could come up with) the information to probably Greg Chapin. I'll put my interpretation in brackets.
"Progress Update on the LDM/NUOCO Mining Project" (dated 4/20/14)
PARAGRAPH #1
"Management of Medinah Minerals, Inc., is pleased to provide the following update received from the LDM/NUOCO managers from Santiago, Chile. The progress of the mining work at the LDM/NUOCO projects has opened up new discoveries which may have significant impact on our understanding of the potential scope of mineralization over the entire Altos de Lipangue claims area."
[It appears that the geoscientists have put enough puzzle pieces together such that they are now comfortable with making some extrapolations from what is being learned at the Nuoco and LDMC to the rest of this 7 Km corridor of about a dozen intrusives revealed by the hyper-spectral satellite imaging study of Perez. Historically, ACA Howe and Gordon House were suspecting that the mineralization at the LDM's Nuoco and LDMC areas was related to that at the Gordon pipe and the linkage might have been the granodiorite dike found at surface at the LDM. Although not 100% diagnostic, "inclusion studies" testing the salinity of water trapped inside rocks suggested this. The problem (not hardly a "problem") was that these structures are 3.2 Km apart which is wider than the diameter of the zone of mineralization of most porphyries which average about 1.5 Km laterally. The evidence suggests that the Gordon pipe and the Nuoco/LDMC structures share a common underlying progenitor (perhaps with 2 lobes) that has some significant size to it. Thus this first extrapolation being made has to do with SIZE.
Another source of excitement might have been FINALLY intersecting the "porphyritic" material at the 1,350 to 1,400 meter elevation level. Up until this time most of the findings had to do with ancillary structures that typically are spawned by a porphyry i.e. breccia pipes and epithermal veins. Yet another exciting finding might have been how close to surface the porphyritic material was found. There is such a thing as a porphyry being too deep to be economical. For me, the most exciting part is the suggestion that we are in an area featuring "supergene enrichment" with the various forms of "high octane" copper being found especially "chalcocite". "Chalcocite" is an insane 80% copper by weight. It is almost diagnostic of "supergene enrichment" (SGE). These zones of SGE enrichment or "chalcocite blankets" can be very thick.
Keep in mind that these recent findings by the geologists and engineers are being layered upon a whole host of findings going back several decades. We already knew about this 7 Km long corridor of about a dozen intrusives making up this property complex. We learned this from the hyper-spectral satellite imaging done by C.S. Perez. Now we know a heck of a lot more about the intrusive hosting the Nuoco and LDMC deposits. We also knew from the IP/IR studies done at the LDMC and near the Nuoco complex that whatever it was that was causing the polarizable "anomalies" (usually metallic sulphides) there was a large amount of that material present. That's what they're currently mining at the Nuoco and LDMC. These new findings being announced appear to have provided some key pieces to this overall geomodeling "puzzle".]
PARAGRAPH 2
"During the LDM tunnel and exploration work undertaken by the private partners, a significant discovery of copper was made. This copper formation appears to be extensive and competent [not just a breccia pipe like the Gordon pipe] and is currently being mined for production by the NUOCO crews. The first rounds that blasted into the formation indicated a consistent and strongly mineralized structure. This appears to be porphyritic in origin, associated with the Altos de Lipangue breccia pipes, [by "associated" I assume sharing a common progenitor pluton] except that this is not a breccia, [like the Gordon breccia pipe] but rather a strong and consistent copper rich zone associated with a porphyry intrusive containing malachite, chalcocite, bornite and chalcopyrite [i.e. the kind of structure that spawns a breccia pipe.] Indications are that the porphyry ore body, with all probability, is very much at a mine-able depth, which should present very large tonnage for capture." [Recall that porphyry structures are nice to work with because they have many "vectors" to guide the geoscientists. There are typically halos of alteration emanating out of a centrally located cylindrical porphyry intrusive that tell the geoscientist how close to the porphyry intrusive itself they are working. The high heat "potassic" alteration halo is usually very close to the porphyry intrusive and often hosts most of the mineralization. There are also concentric zones of mineralization emanating out from the porphyry "stock". If molybdenum is present it will typically be located near the core of the porphyry stock where as copper usually exists further from the core. Gold can inhabit all of the various concentric zones but it has a particular affinity to exist "distal" from the core (at great distances) as "distal gold".]
PARAGRAPH 3
"The LDM project designed to intercept the high grade gold zone has succeeded with the addition of another surprising and potentially game changing discovery. The gold that has been encountered appears to be associated with yet another porphyry intrusive separate from the known copper rich porphyry in the Altos de Lipangue breccia area. [the Nuoco copper deposit is associated with the Gordon pipe whereas this predominantly gold porphyritic material appears to be from a different source.] This contact has revealed a gold rich porphyry/brecciated zone mixed with quartz. We have received initial assays from the 66.5 meter shaft level, approximately 3.5 meters above the high-grade target zone, which contained 6.6 grams of gold per tonne. A second assay taken at the 67 meter level revealed 9.8 grams of gold per tonne. This confirms the assays, at a similar depth, that coincides with the assays received from the DDH-002 drill core samples. We now expect that assays from the downward target zone will confirm assays from the 70 meter section of the drill core." [Which were astronomical.]
PARAGRAPH 4
"Medinah Mining Chile and Medinah Minerals, Inc., have agreed to undertake the expense and evaluation of a Professional Geological Assessment related to both of these discoveries. The LDM/NUOCO partners have accomplished excellent discovery work. Now, it is very essential that Medinah Mining Chile clearly determines the implications of these discoveries to better understand the economic scope of the Altos de Lipangue properties." [This might also be suggestive of the relative importance of this news.]
PARAGRAPH 5
"Medinah Minerals, Inc.’s management team has previously disclosed much of the above mentioned information on Medinah’s website. However, after further discussions regarding the potential implications of this new information, and having reached a plan to request a Professional Geological Assessment, Medinah’s management team has determined this additional information and findings to be potentially material to prospective financial well being and potential profitability of the company." [This is an interesting comment. Some of this information we were already given yet management, citing its "material" nature thought they'd better reiterate it because of the "potential implications of this new information". I took that to be a major league "hint, hint" to shareholders craving for good news.]
"Accordingly, we share this exciting information with our shareholders."
SOME THOUGHTS
In watching the market reaction to some of the press releases that have been put out recently that got some of us doing cartwheels (not very good ones mind you), it reminds me of just how technically complex this industry really is and how tough it is to discern the significance of various developments unless you've been living it for 3 or 4 decades. A $10 million Phase 1 exploration program was met with a yawn. Do people realize how many ounces of reserves and resources can be blocked out with a budget like that and how the size of the exploration budget dovetails in with the calculation of the "purchase price"? I don't have the link to it but the paper by Hurricane Rick reviewing the terms of the mining deals done over the last 3 years in Chile and Peru might remind us where this deposit ranks amongst the best discoveries in recent times.
If you have the inclination, you might bone up on supergene enrichment zones a bit and how powerful they can be economically. My sense is that has the geoscientists amped up the most. In Chile, the 2 biggest issues in mining are POWER and WATER. To say we were blessed in that regard would be an understatement. But the presence of a nice thick SGE zone could knock this thing out of the park. A lot of the porphyry deposits in Chile, especially in the Atacama Desert (the driest place in the world), don't have SGEs. You need rainfall to mix with the surface sulphides to create the dilute sulphuric acid that dissolves copper oxides which allows them to be transported down to the water table. There they can get converted into "high octane" chalcocite. The water tables can vary markedly over the centuries and even seasonally so these zones can get pretty thick.
AI
