One of the better updates, I think they want to have a share holder meeting so we can thank them all for a great deal and there hard work over the years. lol
How interesting: “free-carried ADL production revenues”.
BE, can you educate me as to what this means?
Also, what does “many years to come” mean?
A $50B valuation for MDMN?
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This was one of my favorite parts - I hope it’s OK to still be positive around here.
“The results of these activities, as determined by the AURYN geological team, have expressed USD billions of dollars of commodity values.”
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Well Bubbles. It means, once again, that MDMN is either purposefully or ignorantly using terms that were not mentioned in the official update from AMC. And, per usual, there are going to be a handful of suckers who look towards these new “terms” with renewed optimism because they don’t understand the basic concept of how a 25% (actually 35%) FCI or royalty would deem a project like this uneconomical.
Maybe our BOD is pretending like they will have some purpose post the ADL deal’s closure? LOL
One caveat, there have been rumors of small revenue opportunities from earlier production but those details will hopefully be brought to light in May and they will NOT involve MDMN receiving 25% of cash flow as the operation has to be self funding to a certain degree.
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“Free-carried ADL production revenues.” This is OLD MDMN. Please stop. Let’s keep it simple because too many words over-complicates and confuses.
From my conversations with AMC, this is a straight equity deal. There is nothing more to be negotiated. There are no hidden agreements. If I’m wrong on this, I trust AMC will set me straight, not MDMN.
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AMC has 100 million shares issued.
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MDMN gets 25 million shares of AMC.
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MDMN gets a five-year option to purchase another 5 million shares for $50 million.
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AMC gets 100% of MDMN’s ADL claims.
Yes AMC will do what a good junior mining company with those claims should do. They’ll explore and develop them. Yes, the Caren claims are bonanza grade and should make the whole operation cash flow positive this year. I think we’ll see AMC exceed the reporting standard set by MDMN on every possible front (even as a private company.)
Once this deal is closed and NUOCO gets cleaned up too there is simply no value-add for MMC / MDMN.
Close the deal, reorganize, setup a business trust or minimal cost holding structure, and go home.
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Does this mean Medinah will still be around and NO TO?
It seems likely that at least initially MDMN is not responsible for capital to get initial early production going. By this I mean, MDMN will not have to pay 25% of the capital required to put the Caren into production. I think this would almost be a necessity as part of the deal. Obviously this could only extend so far and may extend no farther than the Caren. As soon as big money is required then as I have said many times, it would be a complete show-stopper for mountain development because the project would become completely uneconomical.
I would summarize the sequence of events to get here as:
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$100M was not an easy thing to do for Auryn and/or it could be used to bring more value by being put into exploration/development
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Our guys were motivated to agree to it by the potential of greater upside in the long term via more exploration - more money later (that will be Phase II of their retirement)
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At the same our guys want / need money now to start Phase 1 of their retirement even if it is more modest than the eventual Phase II. So Auryn came up with a deal by which MDMN shareholders can share in some early production profits.
Auyrn will use their 65% of the gold profits for exploration and development raising the asset and productive cash-flow value of the mountain in the short & mid term, and then eventually things will take care of themselves via a TO and then our guys get something close to their desired SP for complete exit and that is the start of Phase II of their retirement.
It’s not completely unreasonable. But it requires more waiting for final completion.
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I suppose I should explain my rant last night a bit more clearly. It is the direct result of any remaining anger and frustration I have held onto specifically toward JJ and LP and specifically because of their terrible communication and Les’ blatant lying. Believe me, I have taken plenty of losses in pinky plays and if I had at any point in time thought that there was no hope for this investment I would have unloaded at whatever loss in order to get back whatever cash I would have been able to get. I have known for months and have stated here at least once over the past couple of months that the intention of MDMN was to issue dividends to shareholders into perpetuity. I trust that information because it did not come from Les Price. Happy to see that Medinah’s release today offers more clarity on things that all of us are really concerned about. I really liked that part where they added the “s” to the end of the word “billion” in reference to the gold vein.
I hope you all have wonderful lives and get to enjoy the fruits of this wild, often ridiculous ride as soon as possible. I have learned a tremendous amount, have already re-prioritized my life, and so will be moving on as better minds than mine have much more to offer here than I do.
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Why is this not been released to the news wires yet???
This type of thing has been a focus of mine for the past 20+ years. It’s much, MUCH easier than this author has discussed. Simply treat the thoughts as you would a crying baby. It’s in there trying to get your attention for some reason. A thought is a living thing. Give it your unbiased attention. Treat it with curiosity. Ask it what it wants/needs and why it’s trying to get your attention. If you disagree with its message, simply let it know that it won’t serve your desires by following what it wants and let it know why by telling it what you want. Then give it the permission and space to move on or even hang around a while if it wants. It will move on once you’re clear enough with it and make a firm enough choice. Also, it may even like your perspective enough to let go of the instruction it is holding, freeing the energy that makes up the thought, and then it can literally join and become a part of you.
The reason these thoughts get stronger if you try to deny them is the same reason a baby cries louder the more you ignore its cries. You are the parental being in both scenarios. You’re the one that is needed. Give it the attention it needs and the crying/nagging will subside.
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In fact, yesterday, with the intent of actually analyzing yesterday’s news objectively, I actually backed into $500 Million, just on an informal basis (I am no valuation expert).
Today, we read “billions.”
If it’s just $2 Billion, please tell me - what is 25% of $2 Billion?
Think about it.
To step waaay back, I agree with this statement. I have been to the last two AGMs. I have listened to Greg and the other BOD members carefully on this specific topic. I think it was Juan’s dream and it became or is Greg’s dream as well - the “Mountain ATM” idea. LDMC was an attempt to implement this dream. But it was too big for them. I think there are still hints, even in today’s release, that our guys still believe in this dream. We hear echoes of it in many other posters - obviously Mr. B. still believes in it.
This comment is not about “fail” or “succeed”. So don’t take it that way. But it is 100% certain that MDMN will not be here 20 years from now collecting 25% of profits from the mountain. Fundamental mining industry business realities dictate this conclusion. I am not convinced our guys actually realize this. I think it’s possible they actually believe the dream. Else they are just perpetuating this idea because, like April production, it is convenient to do so - tell the shareholders what they want to hear.
The facts are that once $50M, or $150M, or $1000M is required to scale up the mountain, MDMN will not remain because:
1 - they will not have the money to contribute their share because shareholders obviously want all the money to come to them immediately via dividends including the BOD
2 - clearly there will be no “free carried interest” that involves absolution from large amounts of capital requirements involving >$100M. No one could economically afford to put up that capital only to get back 65% of the profits. Thus, the project would not be built. Progress would halt. This is BLACK AND WHITE. There are plenty of things we do not know. But this conclusion we can know with absolute certainty.
3 - So at some point MDMN will have to get out of the way of progress - via TO
How far would Auryn expand early Caren production without requiring MDMN to contribute? In other words, when they have to spend say $25M to build an open pit at Fortuna or to mine Merlin 2 or Merlin 3, will MDMN have to contribute? That is a bit of a grey area IMO. That is a detail that remains to be seen. But certainly at some point MDMN will have to put up their share or get out of the way.
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As Auryn buys shares of MDMN they end up getting back some of the cash they pay out.
CHG, MDMN’s equity percentage is purley dependent on how Auryn raises capital. If they are able to raise capital via debt financing, then MDMN’s equity percentage will remain unchanged. If Auryn raises capital for exploration, mining or acquisitions using stock, MDMN’s equity percentage will be diluted.
I happen to believe the Auryn guys are smart and that if they used equity to raise capital, the expected return will far exceed the cost of issuing capital and each equity percentage will eventually receive a higher return than if they had not diluted.
But what do I know, I am just a small shareholder. LOL
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I have been of the same opinion. Auryn is smart enough to make money off of others people money therefore they will probably finance through borrowing thus avoiding dilution. They financed the first $10m with a line of credit if I recall correctly.
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Don (or anyone) can you post L2 please.
thanks,
Rod
Moving to a future without the current MDMN BOD makes me so happy I could cry. 
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Once Auryn starts production on the Caren and proves up that there are over 1 mil ounces of gold things will start to get real interesting. Don’t forget now that we a percentage of a real company the mm’s will be squirming like snakes when all is said and done. The potential for a sort squeeze has now become a reality.
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