From a Medinah perspective, the fact that Cerro’s ownership on the Alto is over is a good thing. Means we are all one step closer to one mountain, one miner. Whether it was a good thing for Cerro…don’t know until the terms are released.
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SOME THOUGHTS
- Note that Masglas’s 9 assets purchased from First Quantum/Inmet did NOT get tucked into their 100% owned subsidiary “AMC,SpA”. I would picture Masglas as a giant square with a circled inside of it labeled “AMC”. AMC used to “hold” 3 or (4)? options (Medinah, Nuoco, Cerro and Caren(?) but now they “own/holds title” to several groups of mining concessions on the mountain as per the recently updated SERNAGEOMIN map. The 9 FQM assets might be pictured as floating around within the giant square. We don’t know what else might be in that giant square. The giant square is in turn “owned” and has been funded by “Peruvian private capital”. The recent CER article stated that this giant square/Masglas has a voracious appetite to buy even more properties in the Chilean Coastal Range. It appears to me that this “giant square” clearly has access to “giant capital”. One question that arises is whether or not there is an even larger perhaps “gigantic rectangle” out there desirous of the assets being tucked into the “giant square” or perhaps the AMC circle.
- AMC now “owns/holds title” to all of the Nuoco properties (LDM, Los Amigos, Mambo and Columbo) as well as the Caren concessions as per SERNAGEOMIN’s website. They are strongly rumored to have also acquired Cerro’s Fortuna Mine and their two concessions. To me, it does not appear that the “earn in” terms of the prior option agreements with Nuoco and Cerro have been completed especially in terms of drilling meterage. Perhaps these terms have been bypassed and supplanted with other terms especially as they pertain to the early production opportunities.
What exactly does all this mean to Medinah TODAY especially in regards to the probability of AMC exercising the ADL option with Medinah and Medinah soon to be holding a minimum of $100 million in its coffers plus a 15% equity stake in the corporation (AMC) holding title to ALL of the concessions in the entire property complex? As we can all recognize using hindsight, this overall process took a very, very long period of time especially if you start about 40 years ago when the Quijanos sold the family farm and rolled the proceeds into the acquisition of mining concessions on the mountain.
In doing this handicapping you have to recall that Medinah currently owns 100% of the vast majority of the early production opportunities centered on the Merlin Vein system. As far as AMC suddenly doing an abrupt U turn and walking from the deal, I don’t think so. The centralized location of the Medinah claims might make an eventual open pit mine cost prohibitive. This doesn’t even bring into account the permitting packages Medinah has accumulated to date or the surface rights portfolio. THE VISION OF THE “NEW MEDINAH” IS GOING TO BECOME A REALITY VIA ONE ROUTE OR ANOTHER. I would continue to recommend that you not be too concerned with handicapping the probability of a tender offer versus an option exercising because the shareholder rewards would no doubt be similar due to the need for a fairness opinion which would be predicated on the terms of the original option agreement.
- Medinah, the “offeror” in this “offeror/optionee” relationship uncharacteristically gave permission to AMC to go ahead and annex any contiguous mining concessions that they deemed to be of strategic value. How could Medinah possibly justify that unless they had some sort of quasi-guarantee that the option was going to be exercised? As the puzzle pieces continue to be revealed you can now get a better insight as to what occurred at the earlier negotiating tables. Medinah took on the role as the primary facilitator in bringing about the vision of the Masglas/AMC team i.e. the consolidation of both a massive amount of mining concessions and the ownership interests therein into AMC.
- Since Medinah had nothing to do with the acquisition of the 9 FQM assets it would make sense that they don’t deserve a 15% interest therein and thus they are not housed within the AMC circle. AFTER Medinah’s exit from this entire scenario one might assume that those 9 assets might be consolidated into the AMC entity since they are located mainly in the Chilean Coastal Range.
- It appears that in exchange for allowing AMC to annex nearby properties that an option “offeror” like Medinah would typically demand vehemently forbid, it appears that Medinah will indeed gain a 15% stake in these assets as they are integrated into the ADL option agreement. The willingness to perform in the role of the “facilitator” might have been the basis of any quasi-guarantee that the ADL option would be exercised i.e. no performance no guarantee. Forcing your partners to PERFORM before rewarding them seems like a very smart way to motivate your partner to perform.
- Medinah’s already owning 15% of Nuoco and Medinah’s having an option to acquire the 85% that they currently don’t own suggests that the Nuoco assets will be treated in a similar fashion and incorporated into the ADL option agreement. We already have this intent in writing.
- Since Medinah already owns 7.5 million shares of Cerro, one might anticipate that Medinah will somehow end up with a 15% stake in Cerro’s properties (which these shares may or may not already represent) so that its assets might be integrated into AMC in a fashion similar to all of the other assets. AMC would have to acquire the other 85% of the Cerro mining concessions either by fulfilling the terms of their option agreement or via some other route. If an open pit is contemplated anywhere in the future then you almost have to incorporate the Cerro assets into the overall pooling of concessions. How else could you figure out which ore belongs to whom? With all of the recent shifting of attention to the early production opportunities at the Merlin/Caren/Fortuna areas was there even time or the intent to fulfill those drilling meterage terms? A massive amount of new roadwork appears to have been completed and these expenditures may have been disseminated out towards fulfillment of the various option mandates. The drilling mandates do not seem to have been fulfilled yet.
- As these developments proceed, with time it’s going to be difficult to tell the difference between Medinah and AMC especially with Medinah receiving a 15% equity interest in AMC upon option exercising. At that point in time the entity to concentrate on might be “AMC/Medinah” which will control the entire mountain. At that point in time we don’t know what the Medinah BOD composition will be. As far as the “use of proceeds” of the cash component of the ADL purchase price, that matter could probably be addressed via a corporate resolution no matter what the Medinah BOD composition ended up being.
- If AMC intends to go public in the near term on the TSX or TSX.V then they’re going to need a completed NI 43-101 and they’re going to need to “own” a “material or significant interest” in the concessions that are the subject of the 43-101 technical report/F-1. Recall that AMC delivering an NI 43-101 or SEC IG 7 to Medinah is part of the ADL option agreement. My read here is that at that point in time early on AMC was not aware of which exchange they contemplated going public on if that is indeed their goal. That might be why the “or” is interposed between those 2 types of technical reports.
- According to CHFIR’s published “road map”, an NI- 43-101 on the ADL properties is due somewhere around February-March of 2016 i.e. very soon.
- We don’t know exactly which mining concessions are going to be the subject of the 43-101 or SEC IG-7 or if they are already incorporated into that which SERNAGEOMIN tells us that AMC now “owns”.
- If a public listing for AMC is scheduled in the near term, the question arises as to how will AMC acquire “ownership” of the Medinah ADL concessions that are the subject of the 43-101 technical report if they are yet to do so.
- The most information gathered to date that would pass the rigor of a 43-101 technical report would probably be that acquired on the Gordon bx pipe. To my knowledge, AMC does not currently “own” this property at the SE corner of Medinah’s Millalelfun concession group. During the drilling campaign, I had a tough time figuring out why AMC targeted certain drill collars in between already fairly tightly spaced preexisting collars. That made no sense if their drilling was being done to acquire information helpful in telling them whether or not to exercise the ADL option. In retrospect, I think they were just targeting their drill collars as per how a QP filing a 43-101 would do it almost as if the decision to exercise the option was already all but made. Recall that AMC had a two year work permit with the Quijanos in the area of the Caren Mine and now we know what kinds of grades have been found there.
- Would not an option exercising of the ADL option pretty much have to happen prior to any AMC public listing so that AMC could gain “material or significant ownership” (TSX.V mandate)of the concessions that are the subject of the mandated 43-101 technical report and that constitute the more advanced assets of the company going public? I don’t think of the Gordon bx as being one of Medinah/AMC’s more stellar assets but it has had the most amount of work done on it to date.
- I think we need to separate the efforts to bring on line the “early production opportunities” and those needed to pull off the public listing which I believe is the reason why CHFIR (a Canadian firm) got brought into play so early. Why would a U.S. firm and a Peruvian firm retain a Canadian firm to do their IR work? In regards to the TSX and TSX.V the regulators highly, highly, highly recommend that the issuer going public maintain some type of presence in Canada, preferably Toronto, even if it’s just the IR department.
- Thus if you’re of the opinion that AMC is going public in the very near term, then I think most of the puzzle pieces needed to assimilate are already in front of us. They need to “own” the concessions that are the subject of their 43-101 which is mandated prior to gaining a listing.
WHY DOES THE MARKET NEVER REACT TO THE REACHING OF HUGE MILESTONES LIKE AMC GAINING OWNERSHIP TO THE NUOCO, CAREN AND CERRO CLAIM GROUPS WHICH OBVIOUSLY CONFIRMS THE INTENT TO EXERCISE THE ADL OPTION?
Due to the length of time this project has taken, I think that those of us that follow the developments on a day by day basis tend to forget how incredibly complex this scenario must be to a new prospective investor recently hearing about it from his brother-in-law. It would take an incredible amount of time for the average mining investor to get to a comfort level at which she or he would pull the trigger on an investment.
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Why would it not be a good thing for Cerro shareholders? You would think that the major shareholder, namely Juan, would insist on a fair share price return/settlement per the takeover agreement.You would not think that he would give away his CDCH shares for nothing.
No, they are not incompetent. A lot of extremely beneficial things are being put in place and will be coming to fruition for all of us share holders once the path Auryn decides it is going to take is clearly known to them and then communicated to the markets.
At the last Share Holders meeting, it was Kirkland I believe, who said, once the contract is initially signed. Meaning the contract between Aruyn and MDMN there will be a lot of work ahead to build and bring share holder value. It will not happen over night. We are well into that work load, but obviously not at completion yet.
From what we have seen accomplished over the last year and a half, shows us just how steadfast and methodical Auryn is at going about getting things done, and in my opinion, getting them done right the first time.
I’ve seen nothing but continued, progressive progress and I feel confident it will continue as such. The end goal, IMHO, is and will be a Big Win for Auryn, MDMN and all the share holders.
Every step taken is a step closer to that Win Win end goal!
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The answer is very simple. When the market has no transparency for the process and contracts are continuously “reworked”, first with MDMN and now, as rumored with AMC, it becomes virtually impossible for anybody to value the underlying asset. If our BOD/insiders continue the pattern of the last decade there is risk that they accept personal concessions in exchange for reworking the existing contracts and, as an example, accept private or public shares of Auryn instead of $100M. This would NEVER be agreed under normal circumstances BUT, if JJ/Les/Chapin get compensated with the left hand while agreeing to give Auryn certain breaks with the right hand, we shareholders may be at risk. Yes, it’s a win/win for insiders and Auryn but until the abused shareholders have empirical evidence that this self-serving pattern has been broken the market is not going to assume anything.
Until/unless you finally recognize the damage of the BOD’s past actions you’ll continue to be confused by the market’s “disconnect.”
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But John, what you are implying certainly sounds illegal. I would expect that the CDCH/Cerro board has a fiduciary responsibility to other CDCH/Cerro shareholders , which includes not selling us all down the river. .??
It sure is! Unfortunately we don’t know what is happening behind close doors so will just have to wait and see what comes out from the notarized documents which should be next week
First off, I 100% agree with Baldy, these back door rumors/deals are killing the share price. In addition to management lack of ability to promote the company in any way shape or form.
Secondly, i am not sure why the constant drumbeat Masglas/AMC needs to execute the option to go public. Like most mining companies with several projects, the projects are held in separate subsidiaries. While I have no knowledge, I would assume that the First Quantum properties are held seperately or a couple bundled in separate subsidiaries. Mining companies do this so they can get specific project financing, and if one project goes bad, there is no recourse to the parent company.
Thirdly, how do we know that at least one of the First Quantum projects did not have a 43-101? Collectively $15 million was spent. There had to been at least one Tech/Geo report between them.
Lastly, if you look at the TSX-V listing requirements, under Tier II, it states that a company must a material interest in OR at the exchanges discrretion the ability to “earn in” a material interest of a property.
JMO, Masglas will be the public vehicle and AMC will be a sub, that may get some of the First Quantum properties thrown in.
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Something to keep in mind if this gets too lopsided.
http://www.houlihan.com/fairness-opinions-uses-issues/#/step-1
One other thing, this having to wait for notarized docs to be accept by the various Chilean agencies is bs. How may times due companies make public a transaction (acquisition/capital raise) subject to exchange approval, shareholder vote…
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Like the same fiduciary responsibility that would have prevented CDCH from losing claims, back to JJ, while Les (CDCH Chile) was insuring Hoffman (CDCH USA) that past debts would be covered with share issuance and there were no issues? How did Cerro accumulate all of those IOUs to MDMN insiders if they weren’t paying the bills and therefore losing claims? How about the magical 50% claim of ownership by JJ after 15 years of this ownership split never being mentioned? Anybody who’s been invested here for more than a week should understand that fiduciary responsibility, basic business ethics, a legalities are not regarded by this management. See my previous post of the repercussions (“disconnect”) related to this reality.
But, before we cry foul, I’d like to see what is presented to the Days. Even though the Days weren’t even included in the process (pathetic) CDCH USA has controlling interest of the Fortuna claim. If CDCH hasn’t been offered a significant premium to where we trade today it could be interesting to reject the offer and see what happens. This would also give us time to analyze JJ’s claim of ownership (no public records have ever been issued to back of these claims). I’ve encouraged the Days to provide these records. I’m guessing the young lads are feeling a bit pissed off and used after being pushed out of the entire process. Now that they are officially in the “club” we may be able to work with them.
If the price paid for the Fortuna is high enough I really don’t care either way.
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MDMN’s BOD is NOT going to allow any type of illegal activities or anything close to the like, interfere, hold up or jeopardize this contract process with Auryn. And neither is Auryn going to allow anything of the like to happen. There is no back door insider dealings going on. And the share holders will all be taken care of at the end of the day. This obviously is a lengthy process that is playing out, and just because the share price isn’t where some anxious share holders would like it to be to date, does not mean any fiduciary responsibilities are not being met.
With all that is happening, and the way it is slowing coming together with every T crossed and I dotted, it appears something very Big and rewarding for MDMN share holders is on its way. I’m also sure CDCH share holders and any other owner or part owners will all be taken care of appropriately. Just have to let the Business Plan come to fruition.
I see no Dooms Day storm on the horizon… nothing but clear and Blue Skies…!!!
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I’m not sure if naked shorting is allowed as part of the discussion here, but here’s an interesting article regarding Overstock.com’s long battle…
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For all the sky is blue posters you should consider the past actions of insiders.
Consider that fact and the opportunity. I’m relatively confident Auryn would not cut such a deal but anything is possible. I wouldn’t expect it but I wouldn’t be surprised by it.
John, over the past four years, you ( it’s been going on longer than that), have asked how CDCH has been covering not only their purchases but also the taxes, insurance and other fee’s accociated with the interest… Wouldn’t CDCH have lost everything if someone hadn’t covered the debt… Not saying it was done properly, but without income a company will fail…
Sorry John, i reread your post and after going back through some notes on the subject fully understand where your coming from…
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as I recall back around 2003-2007
I believe jj did pay fees, taxes etc. He got a bunch of shares for that along the way–I can’t remember exactly when. its appreciated, but that doesn’t ethically mean you should do whatever you want with no consideration for shareholders .or the regs/law for that matter, but what can you expect from a lawyer who has twice involved himself with known criminals. there is such a thing as evil people who don’t care for anything except #1.they fall in the classification of narcissist, sociopath, psychopath, personality disorder nos etc, people are mere objects to them and it doesn’t matter to them what they do to others. Call for mr. rogers.
Replace CDCH with MDMN and ask the same question
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[quote=“GCCapitol, post:322, topic:808”]
how CDCH has been covering not only their purchases but also the taxes, insurance and other fee’s accociated with the interest…
[/quote] In the APRIL 8, 2015 MDMN update it states:
AURYN owners state that they are committed to the continuation of the program, under the terms of the option agreements with Medinah Mining Chile. The option agreements are specific to the Altos de Lipangue concessions, with NUOCO owners as to the Las dos Marias/Mambo/Colombo concessions, and with Cerro Dorado relative to the Fortuna mine concessions. AURYN states that all of the options will be fully funded to completion.
Current year, 2015 property taxes amounting to USD $40,000 for the three option concessions comprising 7,803 Hectares, were paid on March 31 by AURYN Mining Chile SpA.
FWIW - I took this to mean AURYN was keeping the claims current, including CDCH.
Anybody have contact to Kleen (California dreamer) who might be able to shed some light? After all isn’t he a shareholder of Medinah who used to post on the old mining play who is in the private transaction with LDM? Ah conflict of interest as we sit here not knowing what’s going on but he does??