I know it wasn’t you. lol…Think of anyone who had the balls to buy when this thing when it was in the gutter. They could have sold today at over a 300% gain. I hope I have that right…
Considering people had the balls to buy 300 million shares in Hertz today…there is no telling to how many balls are currently in the air with this market.
Why is everyone so hell bent on equity financing (issuing more shares to raise the capital to mine the near-term gold)?
If 25k Oz/yr of gold is going to net $21M, then why is a line of credit or term loan out of the question?
I don’t want to hear that a bank won’t lend money to an unproven mining operation. If there are enough experts signing off that 25k Oz can be produced and permitting has been approved etc, that should qualify for a lender to give out a loan.
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So this is my first post on the board. I have been an investor in this stock since 2012. Not as long as everyone here but long by many standards. Yes I have positions at all levels from 2012 to today. We are seeing some movement in the stock but by no means should this get everyone excited. I was very easy with $30 to move the share price upwards. The volume was something I looked at today and will tomorrow. Actually you may see me trimming my position tomorrow if the price is right for my lower cost basis shares. It is a great time to make some money here but that said it will take a very long time for me to get to my dollar cost average of my 13M share position. I believe in the company and its long term share price after we become AUMC but I would only be a fool if I did not take the opportunity to trim and take some off the table. This post will sure get some reaction from the group. For the record I have share positions ranging from 0.13 cents to 0.0008 . Trying to catch the falling knife and cut my fingers. Now its time to heal
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There are certainly other options to simply issuing more shares for sure.
Need a few things to happen before back to the 1 cent + levels and stay there.
- Conversion/dividend needs to take place
- Hochschild Mining JV for the LDM needs to move into the drilling phase
- JV partner needs to be obtained to exploit the top of the hill epithermal system in a meaningful aggressive way that includes the Caren, Lampa mine etc.
- Some level of gold production needs to commence.
- Price of gold needs to continue upward.
This is all quite possible but by no means probable.
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Here Here Jimmyp!
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Mangelsen
I have positions at the lower level. Most of us believe in the company but there are higher prices in the near term. We will retrace the recent high prices and exceed it . I do expect wild swings so fasten your seat belt during the wild ride up and down. Heck lets say tomorrow we hit 0.005. Is that really something to cheer about. I say no. It might just help build a stronger base but we have a long way to go before I am happy. Again I am one of the super longs (2012).
I disagree, not all of those things are necessary for a move to .01 in my opinion.
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I don’t understand the speculation re. MDMN shares being issued to pay for some type of production startup. I thought it was pretty clear that the AUMC shares would be distributed and MDMN would commit corporate Hara Kiri. Why? AUMC doesn’t control MDMN directly but once they have a plan they will have a plan cost and MDMN will owe 24% of that plan. At present prices that could be another 1 or 2 billion shares if they could actually sell that many. In the last actual filings MDMN bothered to make, the 2018 annual report it clearly states:
As a minority shareholder in AURYN, Medinah’s rights are limited. Medinah is responsible for its pro-rata share of AURYN’s capital costs and Medinah’s ownership in AURYN is subject to dilution should Medinah not be able to meet any cash calls.
That seems to pretty clearly state what they have in mind. MDMN will be faced with gargantuan dilution or else distribution and suicide. That was pretty much the situation CDCH was in and they chose complete re-organization so that the old company as it was pretty much disappeared and became AUMC.
After that, AUMC shares will be sold to pay for whatever startup costs are required. At least that seems most likely to me.
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deleted by me
Last I checked, AUMC was already at maximum shares outstanding so they would need to due some sort of corporate action involving a shareholder meeting at least ?
100million Auth.
70million O/S
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Hi CHG,
In that 2018 Annual Report, the authors referred to Auryn Mining Chile, the privateco, as “AURYN” (all caps). The paragraph you cited:
“As a minority shareholder in AURYN, Medinah’s rights are limited. Medinah is responsible for its pro-rata share of AURYN’s capital costs and Medinah’s ownership in AURYN is subject to dilution should Medinah not be able to meet any cash calls”
is confusing, where it says “are” in the first line perhaps should have said “were”. Since the Cerro deal went down in August of 2018, for the first 7 months back when Medinah had a 24% stake in the private company AURYN, Medinah was indeed on the hook for its 24% share of capital expenses. For the last 5 months of 2018, they had a 24% stake in the publicly traded “AUMC” or Auryn Mining Corp.
Now, Medinah is just a shareholder in AUMC which is the old Cerro. It’s true that individual Medinah shareholders will indirectly suffer dilution if AUMC sells AUMC shares to raise funds. I don’t foresee this happening but if it did then Maurizio would be motivated to put the pedal to the metal on the share price to minimize the dilution of his own 73% stake in AUMC. That would be just fine with all of us.
Recall that they thought they were ready for production almost 3 years ago when SERNAGEOMIN said Oh, by the way, you need 3 new ventilation/safety manway raises prior to the final sign off. Whatever was needed in the form of capital must have been in place at the time. Auryn Holding Corp. (the financing arm of Maurizio’s operations) already has a $10 million line of credit to explore and develop the ADL. It is with a Madrid-based bank called Banco de Sabadel.
Besides, in order for Medinah to sell shares they’d have to call an AGM and have a vote to authorize more shares. Not being in compliance with the SOS of Nevada, they can’t. They’re currently bumping their head on the 3 BB authorized with 2.85BB O/S. As far as the funds needed to start production at the Caren, they’ve already accessed the ore in between LC-3 and LC-6 in that 28-meter intersection. Distal to LC-6 they located a 42-meter intersection of what appears to be even higher-grade ore than in the 28-meter section. They sideswiped it in the Larrissa Adit by staying to the west of it and drilling short horizontal holes in order to make sure it was still there. That’s how they got the 42-meter figure.
“We have left the vein mostly unexposed so that we can define the boundaries of this section of the vein without having to extract, sort, and stockpile the mineralized sections of ore. Every several meters we have been taking samples and verifying that the vein is still on the east side of the adit. Sample results indicate the grades are higher than the test production runs which were sent to ENAMI.”
The last we heard, they’re still not into the vein that they found in Adit 2A. This is the one with the “bonanza” grades. I’m hoping they clipped it during the fabrication of the 3 ventilation/safety raises. Level 2A is ABOVE the Larrissa Adit (Adit #3). They had 3 shots at clipping it. Management did mention that they thought they were within 20 meters of the bonanza vein. I’m guessing that they encountered some chalcedonic or crypto-quartz which suggested that they were within the “boiling zone” where the high-grade gold tends to be deposited. Besides using “vectoring” like this, how could they estimate that they were within 20 meters of the bonanza grade ore?
They’ve already shipped either 5 or 6 truckloads of ore from the 28-meter intersection back when they were working on the metallurgy with the mill. The first one had very nice grades and the rest, according to management, would come in at similar grades. The recovery process they settled on had an over 90% recovery rate. I don’t sense that it would cost much money at all to recommence quasi-production (via “test” shipments) if they plan to DIRECT SHIP to the mill at Til-Til. If they put a primary, secondary and tertiary crusher in on site they could save on shipping charges and ship a stronger “concentrate”.
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The term DILUTION gets bantered about as derogatory in most discussions. Yes, it will dilute your ownership percentage but its not always a bad thing. The company will usually always get something of value for the stock it issues.
Example:
If stock is issued for cash to begin producing Gold at a mine when that production would never occur without the cash then ultimately your diluted shares will have greater value because the mine is now producing income.
Our JV with Hochschild is a good example as well. We are giving up 51% of the project for them to spend $7million we did not have or chose not to spend. If the drilling proves out the way we hope they can then spend another $23million to earn another 9%. We retain 40% of a project that a professional mining company will develop after having spent $30million. Without them it would just be dirt on a mountain with potential.
Better to have a small percentage of something than 100% of nothing!
Maurizio and his wife own 61% of AUMC they are not going to hand out shares unless there is some serious upside.
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Thanks.I thought there was 100 million O/S.
Right. Good point. It pleases me to think I’ve thought so little about this soap opera of a stock that I lost track of an important detail.
However, I will have to disagree on the money raising point. They will have to raise money for sure, imo.
I own shares in another tiny little miner wanna-be as-simple-as-it-comes silver mine owning company. It is a formerly producing mine that was shut down years ago. For $7M they have put together all the equipment and staff and mine preparation they need to produce. But just to actually start production they need $2M more as it take 2 months to produce ore (which is very very high grade and will simply be direct shipment), do ore-sorting, shipping it to a remote refiner and get paid. Staff, fuel, equipment etc. for 2 months → $2M. And there is no indication that the Caren or Fortuna are yet in a state to be mined.
But my real point in posting was just surprise at the change in commentary. I do not check here too often. But as I recall a year ago or whatever there was pretty much a consensus esp on the basis of former commentary by Wizard that MDMN was going to go away. Maybe I missed some development.
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ELYGF has done some financings (dilution) with Eric Sprott over recent months, and look what it did for them!
Yes. Yes but it owns a 24% stake in an epithermal gold project so no worries. The "corporate deathbed appearance was just an illusion (until you consider how to pay to get the stuff with value in the ground out of the ground) and then it becomes a death spiral of dilution.
Dilution can be a good thing, theoretically, in the case of accretive acquisitions on where the ROIC (return on invested capital) exceed the cost of dilution. Unfortunately, when your main currency (share price/market cap) are lesser in value vs. what this company will actually need to get into production, things become problematic. There is NO way the company can issue debt or receive a loan given that they have no defined resource (read: no security or independently qualified opinion on the economics). This is still a very early stage, exploration company. My guess is a bare minimum of $10m to get into production or a bulk test scenario which is very low margin business (tolling agreements are typically carnivorous during the early days). It would/will cost another $15m-$20m if they want to build a CIL circuit.
Brecciaboy (and long-suffers everywhere),
The part in “The Big Short” that has kept coming to my mind over the years (and strongly again during these past few trading sessions) is the part where Michael Lewis describes the mental state of the dozen or so financial professionals (out of the 7,000 or so who attended the industry convention) who had actually “dug into the weeds” of the financial instruments fueling the housing industry’s incredible rise, and which, if the weedy dozen were reading those instruments correctly (spoiler alert: they were), actually guaranteed that the whole industry was coming down. They couldn’t predict the date (they all considered it long overdue) but they knew the whole house of cards, it was a’comin’ down.
I like to think that when we’re passing popcorn up and down the front row at the premier of the blockbuster “Medinah Minerals” we’ll see you – Doc, aka brecciaboy, aka other things too, I’m sure – finally portrayed as the hero who dug down into all the available geological and financial and mining information plus all the gossip, and for years laid awake at night knowing what nobody else seemed to know: The damned thing actually HAD to explode! Given the rules of geology and the markets, nothing else was possible…
That’s my hope, of course…
– madmen (Brad)
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Just an observation, but I think it’s becoming clearer and clearer that the delays associated with distributing the AUMC shares over the last 29 months have resulted in a loss in the appreciation of just how much development has occurred at the Larrissa Adit (Adit #3) and how close we were to going into production nearly 4 years ago. IMO, the money made on this deal will go to those that make the sacrifice to review the DETAILS of just where these projects sit from a development status point of view as well as the potential economics.
BY WAY OF REVIEW
FROM THE 6/16/19 PESS RELEASE OF AURYN: (my comments are in brackets, CAPITALIZATION used for emphasis)
June 16, 2016 @ 15:33pm
AURYN Mining Chile SpA (“AURYN” or “the Company” or “AMC”) [this is the PRIVATE company that went public through the Cerro corporate vehicle in order to become publicly-traded “AUMC”] is pleased to announce the commencement of mine preparation on the Caren property at the Alto de Lipangue project on Monday June 20th 2016 as scheduled. [this is 4 years ago almost to the day]
We estimate this effort will require approximately two months to complete.
The team that has conducted the planning and design work [past tense, it is already done] will be joined on June 18, 2016 by a group of hard rock mining specialists from Peru who have recently been issued their work permits. [you don’t bring in specialist miners from Peru, secure them housing and arrange for their work permits unless you really, really, really are ready to go into meaningful production. You don’t go running around looking for sources of money AFTER you bring in the workers. Auryn’s holding company/financing arm/AHC had already secured a $10 million line of credit with Banco de Sabadel earmarked for exploring and developing the ADL]
AURYN Mining Chile [again, the PRIVATE company] is planning to start production at the Caren Mine once mine preparation is completed, and we obtain the necessary validation from the Chilean mining authorities that the mine is designed according to the laws and regulations pertinent to the permits held by Auryn. [subsequent to this these authorities mandated 3 new vertical raises for safety and ventilation purposes]The Peruvian experts hired specifically by AURYN have designed the engineering project and mining layout. [the mine design is done; the engineering is done, projections have been made public i.e. at least 25,000 ounces of gold in the first full year of production, 7 months to ramp up, 15 gpt cut-off grade, over 90% recovery rate via simple gravimetrics, etc.]
According to the current exploitation license, the maximum tonnage allowed by regulation is 5000 tons per month. [this will scale up with time as will the ounces of gold produced] AURYN’s engineers plan to ramp up production to achieve this level of production during the next 6 to 8 months, with a cut-off grade of 15 g/t gold.
Metallurgical tests conducted at laboratories in Perú returned an average gold recovery greater than 90%. Test conditions confirmed the best recovery method entails use of a Falcon gravimetric system processing previously concentrated ore. [this is basically a centrifuge. This is tremendous news from an environmental point of view, from a permitting point of view and from an ECONOMIC point of view. The ore is “free-milling”. Of the various metal extraction methodologies, this is extremely inexpensive and environmentally friendly]
These results [recovery rate and being free-milling] make us confident that we can produce a total of 5,000 troy ounces of gold before year-end 2016, and over 25,000 troy ounces in 2017. [if the all in sustaining costs comes in at about $850 per ounce and the POG is somewhere around $1,750 and the by product credits cancel out any unforeseen penalties THEN AN AWFUL LOT OF MONEY CAN BE MADE EVEN AT A DE MINIMIS PRODUCTION RATE OF ONLY 25,000 OUNCES PER YEAR]
Cash flow generated from production at the Caren Mine project will provide the funding required for the aggressive exploration program at the high-potential porphyry mineralization at the Pegaso Nero target, as well as further drilling at the Merlin-Fortuna targets. [since making this statement, Maurizio has commented that the PN is just too big for Auryn to tackle by itself. More recently he has commented that multiple JVs will probably be entered into with “specialists” in the various deposit types present at the ADL.]
FURTHER COMMENTS
Medinah has already paid its pro rata shares of expenses to AURYN/PRIVATECO (“AURYN Mining Chile”) to get the project to the brink of production.
They would have been 3 to 4 years into production by now if they didn’t have to build those 3 raises all of the way to surface and if the distribution of the AUMC shares would have gone quicker.
The ore to be mined first has already been accessed in between LC-3 and LC-6 of the Larrissa Adit i.e. the 28-meter very high-grade intersection and in the 42-meter intersection distal to LC-6.
5 or 6 truckloads have already been shipped from the 28-meter intersection. This was not official “production” it was a “test shipment”. The ore was used to determine the most economic way to extract the gold. “Refactory ore” i.e. tough or expensive to extract ore was not an issue. This is a huge bullet dodged and risk mitigated.
The “cut off grade” chosen was 15 grams per tonne of gold. Many mines make money at mining 1-2 gpt gold. This initial phase of production is going after the really, really rich ore. The lower grade ore can be mined later on.
“Moreover, the use of the Knelson or Falcon Gravity Concentrator is generally of low cost and has no or very low environmental impact.”
“Among the separation processes, gravimetry is probably the cheapest one.”
“Where there is gravity recoverable gold, it is important that it be maximized, as the unit operating cost for a gravity circuit is much lower than that for any other process.”
“This equates to approximately US$44500.00 increase in revenue per month, yielding a machine payback of ± 1 Month and an entire installation payback of just less than 2 months.”
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