Google Earth has updated imagery of the Alto dated 1/13/20. Taking a quick look, it shows changes mostly around the Lampa mine area where a vehicle can be seen next to what looks like a pond(or dark shadows of a pit/entrance?) and perhaps a small bulldozer nearby as well moving some dirt around. (See attached.) There was nothing there in earlier images. Couldn’t see any changes at the Caren mine. The LDM has some subtle changes.
Hi Mike,
Thanks for the update. I think your pond theory makes sense because a recent press release from Auryn cited that Auryn was dewatering the Fortuna/Lampa Mine and “collecting” the water. By far and away, the two biggest concerns in Chilean mining is POWER and WATER. The main power grid goes right over the eastern aspect of the plateau just west of Lampa. So the ADL is sitting pretty in that regard. The ADL also has a gazillion old mine shafts that have filled with water. This provides a nice repository for water without having the need to drill a well. As far as where 95% of the mining is done in Chile i.e. the Atacama Desert and the High Andes the Chilean water authority (the “DGA”) is not granting many new water rights. That’s why everybody is heading in our direction to the Coastal Cordillera.
Welcome Carolg to the Medinah message board. I’m sure you will enjoy every minute of it if you have unlimited patience 
Nope, not on top or bottom
Advertisement? Appears a new feature has been implemented. If same thread remains open advertisement “slot” may appear empty. When I went to respond to your query WIZ, ads started scrolling across the top. I could click on the “ad” but then could not post as the ad took presidence.
If I go to the main “TheMiningPlay” site there may or may not be an advertisement at the top if this was the last site I had opened and then revisited.
Anyone here know anything about the recent pick-up in apparent accumulation of MDMN shares over the past week + ? Doc, you putting your Covid helicopter money into a few million shares???
.001 x .003 now. 3.327M bidding…
836k shares traded before noon. 
WEEEEEEEEEEEEE! Here we go! lol.
Makes you wonder if someone is front loading. News coming soon?
That’s one of only two conclusions I’ve come up with. The other is it’s on a dirtbag promoters list to pump and dump for a few grand.
I could double my share position with $600. Makes me sick but average down. Lol.
Tom
Anyone know of any P&D list that MDMN is on right now? up again this morning.
Nice to see some accumulation going on! Could it be people catching onto Zotron email he got from Solar?
Hi Belmont,
The last we heard from management they said that they have had the ability to distribute our shares since Dec. 15 but that they were waiting for “the appropriate time”. If management thought that we had a long wait ahead of us still, I doubt they would have communicated to us that we’re already almost 6 months into waiting for “the appropriate time” after they had the ability to distribute the shares. Thus, I sense that “the appropriate time” is coming sooner rather than later.
We need to remember that the shares we’ve been impatiently waiting on to become unrestricted, allocated and distributed were the legal “consideration” (payment) for Medinah’s properties. In a sense, Medinah and its shareholders haven’t been paid yet for what they sold. In my opinion, this might have a handcuffing effect on Auryn doing deals on the various subdivisions of the ADL Mining District that Medinah used to own. This wouldn’t include the Caren Mine since Auryn was the prior owner.
The ex-Cerro shareholders got paid with free-trading AUMC shares. But even for the ex-Cerro shareholders, AUMC is currently paralyzed from doing much of anything because only 5% of its shares are free-trading. I would assume that management is doing everything in their power to distribute these shares ASAP.
As far as what “the appropriate time” refers to, I’m going to assume that it has to do with some type of significant material event transpiring that might give the AUMC share price support if not a good jolt. From now on, Auryn management will “own” the AUMC share price and it will become the “currency” with which Maurizio can do deals in order to morph into a “mid-tier gold producer”. Up until the time when the AUMC shares get distributed, Auryn management is all but forbidden to take part in any promotional activity that might run the share price up to unsustainable levels because only 5% of the shares are free-trading. There probably aren’t 3 publicly traded corporations on the planet with only 5% of its shares in a free-trading status.
At the informational meeting in Vegas about 3 years ago, Maurizio made the comment that he wanted Auryn to rapidly become a “mid-tier gold producer”. In this industry, the mid-tiers are those that produce in between 300,000 and 1 million ounces per year. In other communiques to us, Maurizio cited that the plan was to eventually become a major miner.
However, the projected initial production rate for the Caren Mine was only “at least 25,000 ounces per year” but this was tied to the initial allowable mining rate set by SERNAGEOMIN at only 5,000 tonnes per month which Maurizio commented was scalable upwards. SERNAGEOMIN will crank up the allowable mining rate as a new producer proves to them that it is behaving in an environmentally responsible manner. I’m hoping that fabricating those 3 ventilation/safety manway “raises” might qualify us for the next higher allowable mining rate. We’ll see.
Even after factoring in what the Fortuna Mine might add to the Caren Mine’s output, if all goes well there, I would think that we’re still a far cry from 300,000 ounces per year as the minimal qualification for being a “mid-tier producer”. Don’t get me wrong, even cranking out 25,000 ounces per year with an all-in sustaining cost somewhere around $850 per ounce (my estimate based on industry norms and the infrastructure at the ADL) you can make an S-LOAD of money quickly with the POG over $1,700 per ounce. You can do the math. In the Caren Mine’s Larrissa Adit, very high-grade ore has already been accessed in those 28- and 42-meter intervals we read about.
I sense we’re looking good either way. If Maurizio wants to make acquisitions in order to become a mid-tier producer, he’s going to want to move the share price of Auryn up a whole bunch and rapidly. He doesn’t want his 73% or so stake diluted any more than we want ours diluted. If the combination of Caren and Fortuna Mine production is extremely “scalable” then maybe he can reach his goal with what we already have but that seems like a stretch. Another comment that Maurizio made at the informational meeting was that “the market will take care of itself”. I’m not sure how to interpret that comment but it seems to imply that a whole lot of promotion might not be necessary.
Maurizio is on record as stating that after the first quarter of production he plans to evaluate two matters. One was a share repurchase plan and the other was the distribution of cash dividends. These are two ways to move a market without promotion. If the company can mop up a bunch of ridiculously cheap shares and cancel them then this would “prime the pump” for more generous cash dividends (on a percentage of share price basis) because less shares would share in the cash pool allocated to dividends. If the anticipated mine life is significant, then generous cash dividends will drive the share price to higher levels by itself. In an environment featuring zero interest rates like we have today, generous cash dividends will attract followers. The share price will be driven upwards to a point at which the dividends are moderately generous (maybe 6% per year or so) and not ultra-generous.
If gold production levels naturally increase through time which is the norm, then theoretically the pool of cash to be distributed can grow throughout time even without a share repurchase program up front. Until the cash becomes available, management doesn’t need to make up its mind on whether or not to repurchase and cancel shares. If the market undervalues the stock then you buy back and cancel shares prior to any cash dividend distributions.
The exciting thing about positive cash flow for an early producer is that SHAREHOLDER REWARDS can be all but GUARANTEED. If the market undervalues the share price then that’s fine. You buy back and cancel shares and then all shareholders will own a slightly higher percent of the action and a slightly higher percent of all subsequent cash distributions. Until a junior producer goes into profitable production the OTC markets can be absolutely brutal as we have witnessed.
WHAT IS THE SIGNIFICANCE OF RECEIVING CONFIRMATION THAT THE AUMC SHARES WILL FINALLY BE DISTRIBUTED “AT THE APPROPRIATE TIME” AND AUMC WILL NO LONGER BE THE ONLY STOCK ON THE PLANET HAVING ONLY 5% OF ITS SHARES IN A FREE-TRADING STATUS?
In order to address this, we need to appreciate the paralyzing effect on a corporation like Auryn Mining Corp. (“AUMC”, formerly “CDCH”) having only 5% of its shares in a free-trading status for the last 2 ½ years. Although all Medinah shares are indeed free-trading, this paralysis has also extended to Medinah (“MDMN”) because of its 24% ownership stake in a paralyzed “AUMC”. Having only 5% of a corporation’s shares in a free-trading status is EXTREMELY ATYPICAL and so too are the side effects the corporation suffers from. Investors don’t like uncertainty.
One enigma that has always needed explaining is how can the share price of a mere “holding company” (Medinah) which holds a 24% ownership stake in a company about to go into very high-grade gold production (“AUMC”) drop 99.7% during the same time frame in which the price of gold has gone up about $500 per ounce. There has to be an explanation besides Medinah’s past corporate governance issues.
I think the explanation has to do with the share price of Medinah being placed into what amounts to be a self-propagating “death spiral” due to a combination of factors not the least of which is the corporate paralysis of “AUMC”. Over the last 2 1/2 years, it’s almost as if Medinah’s share price was put into an elevator stuck in the “down” position wherein the side effects of the corporate paralysis trump even the fundamentals associated with REALITY. How does this phenomenon involving corporate paralysis and self-propagating share price death spirals work?
The decline in the share price of Medinah accelerated when the corporate governance miscues of a prior management team member were made public. Shareholders learned that there were nearly twice as many shares outstanding as they had been led to believe. Thankfully, Medinah senior management donated their substantial shareholdings back into the corporate coffers to mitigate some of the damage. After this an immediate perhaps 40% or so haircut was definitely in order to keep the market cap constant but a 99.7% drop amidst great news for the gold sector might seem a bit excessive?
Shareholder frustration became elevated due to perhaps three different phenomena. The first was the declining share price. The second was the misperception that the new Auryn management didn’t particularly care about the declining share price because they refused to inject any positive news to help lessen the bloodletting. The third was the lack of credibility induced by the past corporate governance miscues. If Medinah’s old management team couldn’t tell the truth about the number of shares outstanding then might prior press releases have been misstating the bona fides of the mineral assets? Thankfully, Auryn’s exploration results, especially their drill results, the trenching results and the ridge crest sampling results at the Pegaso Nero, put to rest any questions about the bona fides of the mineral assets.
In retrospect, I don’t think that many shareholders were aware that a management team of a corporation with only 5% of its shares in a free-trading status CANNOT release positive market moving news without risking a significant upward move in the share price to unsustainable levels only to entrap momentum players at a price level that was destined to correct later. The primary mandate of both FINRA and the SEC is to provide “investor protection” to investors that might fall into these circumstances. The case could be made that AUMC should have been halted during this time period.
As the shareholder frustration levels peaked for all of these reasons (declining share price, perceived management apathy and loss of credibility) a critical level of frustration was reached that induced many shareholders to end their misery and sell. This threw gasoline onto the existing death spiral fire and before you know it, the share price is down 99.7% from its previous highs EVEN THOUGH THE VALUE OF THE ASSETS HELD WAS INCREASING MARKEDLY DUE TO VERY HIGH-GRADE GOLD ASSETS PRESENT AT THE CAREN AND FORTUNA MINES AND THE PRICE OF GOLD BREAKING OUT TO THE UPSIDE.
It doesn’t make sense, right? Actually, I would argue that it makes perfectly good sense if you look at the totality of the situation and all of the moving parts. Let’s frame it this way: Can you imagine what would have happened if the price of gold had DROPPED $500 during that time frame instead of having gone up by $500? Yes, I can imagine it. I don’t think that 99.7% figure would be affected one iota even with this metaphorical $1,000 swing in the price of gold. The share price was clearly dislocated from REALITY because of this rather unique set of circumstances.
What does corporate paralysis or share price paralysis look like? For me, the giveaway was the trading on November 1 of 2019. In the last 5 minutes of trading on this Friday afternoon, somebody sold 26 million Medinah shares knocking out bid after bid. The seller, whether an individual or a brokerage firm, clearly didn’t care what was paid for the shares being sold. Prior to this, it appeared that the market was bottoming out at about $0.0016. The selling drove the share price all of the way down to about $0.0005 where it closed that day.
We’ve all seen this phenomenon before. It looks as if some brokerage account got “sold out” and a broker was ordered to liquidate the account at all costs by the end of the day. Note that this was one day after a “month end”. It may also have been a frustrated shareholder trying to make a statement or perhaps a margin call. What typically happens in these scenarios is the share price will gravitate back to the previous $0.0016 level after a few days. In this particular case it didn’t. Despite the obvious nature of the selling, the $0.0005 level BECAME THE NEW NORM. There was ZERO resilience to the share price. It was as if it was paralyzed and in a sense it was. That’s enough about corporate or share price paralysis. From this day forward you’ll know it when you see it.
How big of a deal is an upwards move in the price of gold by $500 for an about to be gold producer? We have to keep in mind that in this particular industry, increases in the price of gold tend to drop straight to the bottom line because of the relatively fixed nature of the costs to mine and process a tonne of ore. This is referred to as LEVERAGE. In the case of Auryn involving a $500 upwards move in the price of gold, A LOT OF LEVERAGE. The problem in the Medinah/AUMC scenario is that this tremendous amount of LEVERAGE is only going to positively impact the share price AFTER the AUMC shares are distributed (which will remove the corporate paralysis) and a production permit is in hand.
Furthermore, statistically only 1-in-1,000 junior explorers ever make a discovery that makes it all of the way into production. Therein lies the ENIGMA. The share price of what clearly appears to be one of those 1-in-1,000 fortunate junior explorers with a gold discovery that is about to go into production dropping 99.7% as the POG is breaking out and an incredible amount of LEVERAGE becoming within grasp.
In addition to this, the mining industry is currently experiencing a 32-year low in new discoveries at the same time that the Mineral Reserves/Mineral Resources (MR/MR) on the balance sheets of the majors is at a 31-year low. This only augments the tremendous amount of LEVERAGE already present. For a major or mid-tier miner, projects in the pipeline is not a good idea, it is existential. The DEMAND for new discoveries, especially gold discoveries, is through the roof. The SUPPLY of new gold discoveries is at historical lows. This is yet another form of LEVERAGE. This time it is over those larger miners that need to replace the dwindling amount of reserves/resources on their balance sheets.
Yet more LEVERAGE is attainable when you consider the World Gold Council’s statistic that even for the lucky 1-in-1,000 junior explorer with a significant discovery in hand, it takes an average of over 20 YEARS to get that project into production. These incredible statistics collectively connote the fact that going into production is a very big deal partly because of the rarity of the event. Going into gold production right after the POG advanced about $500 per ounce is over and above facing down these distant odds especially if that 20-year figure can be reduced to perhaps weeks or months. In this industry, we’re always reading about the “20- and 30-baggers” that other investors have experienced. The statistical reality is rather sobering unless an awful lot of stars line up properly.
Recall that the Auryn management team had already announced the commencement of production from the Caren Mine at the rate of “at least 25,000 ounces of gold per year” before they were mandated by SERNAGEOMIN to construct 3 ventilation/safety vertical “raises” prior to commencing production. In fact, Auryn already spent most of the CAPEX needed to drift the Larrissa Adit into the belly of the mountain where they encountered a 28-meter interval of very high-grade gold as well as a 42-meter interval of “what appears to be even higher-grade gold”. Management did not or could not reveal the actual grades found in the 42-meter intersection. These intersections were reported to have CONTINUITY over 60 vertical meters, 30 meters above the Larrissa Adit level and 30 meters below.
Management did NOT commence production at this time pending the completion of the 3 ventilation/safety “raises”. Keep in mind that the project was deemed by management to be “economic” back when the POG was approximately $500 cheaper per ounce. One might expect that the economics might be rather robust today in a low CAPEX environment like that present at the ADL where access to POWER and WATER is already in place. Remember, the high-grade ore has already been accessed. This is not the kind of project, like a porphyry or VMS deposit, that a miner patiently spends tens of millions of dollars on a massive drill program blocking out MR/MR while investors patiently await positive drill results that might move the share price upwards even though PRODUCTION is nowhere in sight. The Pegaso Nero might fit into that project type, not the Caren Mine. It is “shovel ready” and the LEVERAGE associated with the upward move in the POG is readily accessible. After what the Medinah shareholders have been through, I would sense that some immediate gratification is in order. It appears that the Caren Mine is going to make a lot of people a lot of money but from a relative value point of view, Medinah/Auryn is not a one trick pony. The big overall value is contained in the Pegaso Nero copper-moly porphyry. Recall from Auryn’s Press Release dated Dec. 15,2017 wherein Auryn management laid out its goals (my comments are in parentheses):
1)Creating a management team and Board of Directors suitable for an exploration company intent on becoming a junior and MAJOR mining company.
2) Launching a MASSIVE exploration program on the Altos de Lipangue mining district including entering JV agreements (Note that this is plural, Maurizio already commented that the PN is too large for Auryn to attack in a solo fashion) with companies that have the specific expertise necessary for exploring and mining the variety of targets we believe we have in the district.
3) Focusing our resources on becoming an active gold producer by reopening the Fortuna gold mine and actively exploring and mining the gold veins found in the Larissa tunnel.
4) Subject to regulatory approval, consolidating the capital structure (already completed), changing the name of the company (already completed), and moving to a higher exchange or tier on the OTC (yet to be completed but might necessitate a much higher share price).”
A COMMENT: With all of the delays encountered in regards to the distribution of the AUMC shares, shareholders and prospective investors might be well served in reviewing past press releases. The overall goals have been fairly well articulated but no doubt forgotten by most of us.
The short-term goals are to make a bunch of money through gold production at the Caren and Fortuna Mines and eventually becoming a mid-tier gold producer. After one quarter of gold production share repurchases and cash dividends will be considered. The more intermediate term goal is to launch a “MASSIVE” exploration effort on the ADL utilizing JVs (plural) with mining firms with expertise on the deposit types present at the ADL.
At the informational meeting in Las Vegas about 3 years ago, Maurizio had permission from Freeport McMoRan to mention their name and their having signed an NDA with Auryn and being a party of interest at the Pegaso Nero. They had already scheduled a due diligence visit at the time. Two other major miners had shown an interest in the PN and both of them were “even larger than Freeport”. We don’t know if these indications of interest had resulted in a commitment or not. Until Auryn has fully paid Medinah for these properties by unrestricting, allocating and distributing the AUMC shares I would doubt that any press release could be made to that effect. This is not to say that there is a deal in place but only to say that if there were one we wouldn’t know about it because of that 5% free-trading issue and the paralyzing effect it involves. I’m actually a little bit surprised that Hochschild entered into a JV with Auryn prior to Auryn fully paying for the LDM.
Back to the discussion on gold production: The last time we heard from management on the matter, they informed us that while drifting the Larrissa Adit, they felt they were within 20-meters of accessing the bonanza grade ore contained in “Adit 2A”. Management cited the ability to simultaneously produce from 3 different “production adits” while continuing exploration via a 4th crosscut “exploration adit”. During the time frame in which things were heating up in this Larrissa Adit, management was buying a very large amount of Medinah shares out of the open market in the 5- to 10-cent range AT OVER 100 TIMES THE CURRENT SHARE PRICE. Today, management is forbidden from making purchases in the open market because they are clearly in possession of nonpublic information.
Interestingly, the open market purchases by management were done in an extremely professional manner in which they forewarned shareholders and prospective investors of their intent to make significant open market purchases and later they confirmed their purchases. It’s almost as if they were protecting their backsides in case these purchases were made prior to a significant run up in the share price. At the informational meeting that Auryn hosted in Las Vegas about 3 years ago, management was asked in the open forum as to the nature of these purchases. The answer was that management reserved the right to make open market purchases when they sensed a “bargain”. At this very same meeting, Maurizio commented that his goal was to rapidly become a “mid-tier gold producer”. In this industry, the “mid-tier gold producers” produce in between 300,000 and 1 million ounces of gold per annum. This is a far cry from the projected initial rate of 25,000 ounces per year from the Caren Mine. Even after factoring in production from the Fortuna Mine it would appear that Maurizio is counting on these deposits as having significant SCALABILITY or he is going into acquisition mode. Either one would obviously be fine because if he is going into acquisition mode he will be highly incentivized to do everything in his power to move the share price of AUMC up significantly.
As you can see the ENIGMAS are starting to line up in series. The “smart money”, aware of all that is going on in the background and in constant contact with the world class geoscientists in their employ, sensed a bargain when the share price was trading at 100-times today’s share price. Corporate and share price paralysis is very real as long as all of the ingredients are present. The dynamics involve shareholder frustration levels hitting a peak as the share price plummets, inducing yet more people to sell, management appearing not to care and what you’re left with is a self-propagating death spiral that outmuscles any fundamental REALITY. All investors have their snapping point especially near the end of a tax year when the misery can be slightly mitigated by selling and accessing the tax write off.
The question arises as to what it would take to first of all end the corporate paralysis and the death spiral of Medinah’s share price and secondly to at least partially commence the retracement of the path that the share price had taken during its “cliff dive”. CLEARLY THE SOLUTION IS TO UNRESTRICT, ALLOCATE AND DISTRIBUTE THE YET TO BE DISTRIBUTED AUMC SHARES (ALBEIT AT THE “APPROPRIATE TIME”) AS WELL AS SECURE THE PRODUCTION PERMIT. Was the recent confirmation from a BOD member that they have been given permission to finally distribute the AUMC shares and that they will do it “at the appropriate time” a big deal? YOU TELL ME! Is breaking the back of something as strong as corporate and share price paralysis a big deal when various forms of LEVERAGE are finally within grasp?
We need to soberly appreciate the fact that, for the last 2 1/2 years, share price appreciation in Medinah’s shares may have NEVER EVEN BEEN A POSSIBILITY UNTIL the AUMC shares were distributed. You can’t fight a self-propagating death spiral when management’s hands are tied behind their back for almost 3 years. Remember, this 5% free-trading scenario leading to perceived management apathy is EXTREMELY ATYPICAL and one might expect ATYPICAL market behavior during this time frame. I find some comfort in the fact that the past totally dismal share price behavior really might make sense. Perhaps a share price retracement of the “cliff dive” might also make sense if the causative factors for the “cliff dive” are eliminated and the various forms of LEVERAGE silently building up in the background are tapped into.
Another thing we need to appreciate is how Medinah has been APPEARING to any prospective investors. To a shareholder or prospective investor, when Medinah chose to cease filing quarterly informational disclosures to the OTCMarketPlace and thereby acquire the dreaded “stop sign” insignia warning investors to steer clear, the APPEARANCE was that Medinah could be on its corporate deathbed. Going into default with the Secretary of State of Nevada added to this APPEARANCE. Medinah was temporarily rendered 100% NONPROMOTABLE even if its 24% stake in the ADL would later turn out to be worth a significant amount of money. The share price dropped 99.7% from its high of about 18-cents to about $0.0005.
Couple of questions brecciaboy:
Do you sometimes think YOUR POSTS might be solely responsible for the recent rise in share price? (I think this.)
If not, do you have reason to believe that something is “brewing” behind the scenes? (I don’t think this.) It only took someone spending about $5,000 today to move the price up nearly 20%. My hunch is that your posts are solely responsible. And I applaud your posts! They make as much sense to me as anything else I’ve read or seen. (I’m aware of Baldy’s position that – I’m paraphrasing here – any real player in the market can buy any number of producing gold mines today, if they want. I expect we’ll hear from Baldy again soon – and I hope so – I applaud his posts, too.)
Was today’s post an “expansion” of your post from yesterday? To me, it seems as though you’ve got a work-in-progress going? Are you aiming at something in particular?
Are you in contact with anyone from the company side? If so, anything you can share?
Do you run these scenarios and speculations by anyone else before you post them? If so, do they add to them, offer any sort of opposing “facts”?
At the Las Vegas meeting you, as I recall, told me that you were entirely “self-taught” on mining (and investing, too?) – is my recollection correct?
I’m sure as soon as I “press send” I’ll think of ten more questions, but I’ll stop here.
Thanks for posting. It’s at least a nice distraction…
– madmen (Brad)
Hi Doc. I looked back at the MDMN news release dated 5/16/16. It mentions that Masglas purchased 278,763,318 shares from JJ in two private transactions. At that time the MDMN stock price was about .017/share. Did you mean “private transaction”?
I remember the discussions speculating as to what they might have paid JJ. I remember most thought he was going to demand a significant premium to sell them.
If we work the numbers that are provided in the MDMN 5/16/16 news release we can get a sense of what Masglas/Auryn were valuing things at.
Assuming Masglas paid .05/share for JJ’s 278million shares and they thought they were purchasing 20% of MDMN ( Before the shares outstanding doubled due to fraud ) That would put the value of MDMN at $70million. Since MDMN owns 25% of Auryn after the sale of all the ADL to Auryn that would value AUMC at $280million. AUMC as of Fridays close at .20 per share is valued at $14million. 5% of what they thought the value was in 2016.
Perhaps the “Paralyzing effect” as Doc suggests.
Also note that friends and family of Auryn spent .07-.10 to purchase over 100 million shares on the open market.
How did that happen at that price in the open market when the price around that time was .017?