The Mining Play

Auryn/Medinah - 2021 - 2nd Half General Discussion

Hi Doc (or anyone else who might have some knowledge pertaining to my queries below) ;

Given the “plus the $40 million plus tax loss carry forward from Medinah” that you mentioned, I’m curious about what AUMC should do :

  1. A buyout would definitely allow Auryn to assume the tax loss.
    or
  2. If the AURYN shares are distributed as a dividend, then wouldn’t the tax loss not be usable by AURYN ?
    or
  3. If the AURYN shares are distributed as a return of capital, then wouldn’t the tax loss not be usable by AURYN ?
    or
  4. Is there another way the AURYN can retain the tax loss ( and prehaps gain the AMNP assets ) ?

It does seem that the tax loss is something that AURYN would want to take advantage of for the future !

Rod

Just a bit more on the rule change.

Very helpful video that responds to frequently asked questions. It appears that the companies that are non-reporting after Sept 28 will still trade basically on the grey market. (I’ve easily bought/sold on the grey market before with a standard broker.) Biggest difference is lack of intraday visibility of quotes to the general public. Of course, a particular broker may choose not to allow this. It also appears that brokerages themselves may yet to fully understand the rule changes either. Here is the link to the video and also the latest OTC July newsletter that explains all of this.

http://createsend.com/t/i-F6967B30006BC0B92540EF23F30FEDED

Thanks Mike, that was very helpful. Here’s a link to the process for gaining custodianship for a Nevada domiciled corporation:

Someone refresh my memory on just how MDMN settled it’s loan with AUMC (AURYN). Did AUMC accept shares of MDMN in repayment, or was it just the newly created restricted AUMC shares? It was reported that AURYN, or it’s affiliates, had acquired 350 M shares of MDMN, mostly on the open market. Were these consolidated into cert form from all the individual brokerages in which they were obtained?

I note on MDMN’s last filed Annual report there are “3,785 as of December 31,2018 shareholders of - record and an unknown number of beneficial shareholders that own their shares via DTC.”

Does AUMC now hold all it’s MDMN shares purchased on the open market in cert form?
Who are the 3,785 shareholders of record and what happens to their certs after AUMC shares are unrestricted? Even though I don’t own any MDMN certs I would think all these cert holders would like to see AUMC shares reach several dollars before the final unrestricting takes place. It is rather difficult to have brokerages accept penny stocks in cert form and MDMN certs will need to be converted to tradable AUMC shares after the unrestricting takes place. There will be a final day of reckoning with the brokerages that do not have the MDMN shares in DTC cert form needed to convert to AUMC shares, or am I missing something in the way this has to work out?

I wonder also how the following provisions will be answered and handled by the court given that MDMN is a holding company and not a shell . What would a custodian do different than what MDMN is currently doing (see 3.4b(1-6) in BB’s link above)?

1.(e) Evidence of reasonable efforts by the applicant to contact the officers and directors of the corporation for which the custodianship is sought.

1.(f) Evidence of a demand by the applicant to the officers and directors of the corporation for which the custodianship is sought that the corporation comply with the provisions of chapter 78 of NRS and that the applicant did not receive a response.

3.4b (1-6)

Richard;

I assume that MDMN would have to supply the AUMC certs directly (or thorough their transfer agent) to the cert holders, as is what happens with a stock split, as quoted below.

“When a stock splits, the company divides its existing shares into multiple shares in an attempt to boost the liquidity of the shares. Nowadays, if you still own paper certificates, you will nevertheless be registered with the company as a shareholder of record and will receive your newly issued shares electronically.”

Pacific Stock Transfer Company (PST) is the transfer agent, I believe.
" The transfer agent records transactions, cancels and issues certificates, processes investor mailings, and handles a host of other investor problems, including reissuing lost or stolen certificates."

Does AUMC now hold all it’s MDMN shares purchased on the open market in cert form?
Only AUMC would have that info. Don’t think they’ve ever reported that.

Who are the 3,785 shareholders of record and what happens to their certs after AUMC shares are unrestricted?
This question is unclear. The AUMC share unrestriction should have no effect on MDMN, except that Medinah will have unrestricted shares of AUMC.

Were you referring to the distribution of AUMC shares to MDMN shareholders ?

Rod

24 mil bid @ .002 staring to build coming into last week of the month.

Yes,
But as you explained, that is really the easiest part of the equation as I understand it. Maybe someone more knowledgeable has a better answer. MDMN cert holders already have “secure” restricted AUMC shares held by the TA and not MDMN, correct? This is analogous to MDMN (corporation) already having a cert for their prorata portion of “street shares”. If this is not correct, then please explain. Now for distribution, MDMN needs to query brokerage houses as to how many shares of MDMN they hold to transfer a fraction of MDMN’s one “master” cert each brokerage will receive. Each brokerage can only receive a proportional fraction of MDMN’s DTC cert based on the total number of shares combined that brokerages report. It is each brokerage that is responsible for distributing new unrestricted shares of AUMC to each client holding MDMN shares in their brokerage account. Now why would many brokerages allow and encourage only sells of MDMN? Some have done this for a long time. As has already been mentioned by several on the thread, Fidelity has allowed only sells of MDMN for several years, ever since MDMN went dark. Hmmm

Now with that information, this new rule change has a deadline date attached, brokerages will need to check if their cert from DTC matches the number of shares they hold in in their clients’ accounts. I would doubt that there is currently a good match. The unusual trading volume undoubtedly has something to do with brokerages trying to get their inventories of MDMN street shares to match the MDMN cert each brokerage holds from the DTC. I still wonder exactly what changed Auryn Mining Corp’s original plan to distribute AUMC shares as an allocation and changed instead to a dividend. The only assets of MDMN, a holding company, appears to be shares in mining companies that need to be distributed to shareholders. There is no ongoing business. Although it is taking more time than any shareholder had anticipated when becoming a shareholder, I actually like AUMC management’s current measured approach to bring value to all shareholders equally. Given the fact there are only 4,096,542 shares held at DTC, it makes sense that the allocation or dividend distribution from MDMN would wait until sufficient production allows AUMC’s freetrading shares to attain a rather high value based on gold production. These shares appear to be rather tightly held. How will brokerages balance their MDMN inventories if the number of shares held in accounts does not match the allowable number represented in their DTC cert? The clock may be running out.

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BB,
I think it was back in 2015 before the consolidation, name change, Auryn Mining Chile SpA contemplated dividends. Do you actuall still think that is true? In early 2016 AURYN Mining Chile SpA (“AURYN” or “the Company” or “AMC”) exchanged 25,000,000 shares of AURYN Mining Chile SpA. The 25,000,000 shares, which represent a 25% equity stake in AMC, have been delivered to Medinah Minerals.

About that same time someone posted

In the earlier MOU it was stated:
“MDMN effectively becomes an Asset Holding Company. All percentage cash flows resulting from production on the mineral-rich Altos de Lipangue Project claims will be disseminated to MDMN by AURYN Mining Chile SpA on a quarterly basis.”
Do we know if this was retained as part of the final agreement? I think many shareholders are banking on it, although I fully expect AURYN to put all exploitation proceeds into further exploration and exploitation for the next two years.

We all know about what transpired later in 2016 to derail and cause the delays in anticipated production over the past 5 years. It’s been a hardship for all shareholders still remaining with this investment. The 5% of the mountain in free trading AUMC shares represents only CDCH’s converted portion. The remaining shares have not been released quite simply to prevent current shareholders from being diluted to smithereens when all those new AUMC shares become free trading. Fearful and frustrated shareholders would likely rush for the exit with over 16 million newly released shares on the open market, especially if share price is low.

One should remember that there are approximately 48 million restricted AUMC shares held by insiders that will not be released all at once. There must be enough value created in the company from several quarters of positive production to show a real value and positive cash flow in order to retain a share price and raise money. Positive cash flow will garner attention, but the stock price must remain high enough for some of the unused 30 million treasury shares to kick-start expanded production and exploration. To do otherwise would be a colossal waste for all current investors holding MDMN shares.

New investors must be brought in for the right reasons, and that is what will allow the company to successfully mine in the long run. This entire process unfolding is to keep our ownership percentage in the mountain from being diluted and destroyed. It must be recognized that the premature release of millions of new AUMC shares before production is off the ground would be a costly mistake. As painful as it is, management knows what it has in the mountain and what it must do to capitalize on it. The company is going about it in a logical and methodical way so as not to destroy the current share structure. Management intends to provide maximum benefit to those shareholders that have endured for so many years.
(Hey DOC, where did you say you parked that tank?! :wink:)

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Hi EZ,
For the newcomers, the “tank” reference has to do with the fact that for around a decade or so, almost every single opinion rendered by Brecciaboy, was shot down by a certain party no matter what the subject was. After making a post, I would say I’m heading for the tank or some other forum participant would say, Doc you’d better head for the tank after that post. The truth of the matter is that the tank is currently being detailed because I’ve got a hot date coming up! Get your own damn tank!

There’s not going to be any “rush for the exit with over 16 million newly released (AUMC) shares on the open market”. Those 16 million new AUMC shares denoting ownership stakes in the ADL ALREADY ARE IN THE MARKET. Today they’re known as “Medinah”. Today’s “AUMC” is the “nominal” owner of 100% of the ADL with Medinah’s shareholders owning 24% of the action. So, the “pure” Auryn only investors sort of only own 76% of the action. There’s a lot of crossover so it doesn’t really matter. Medinah and its 24% stake in the ADL is extremely liquid right now. Auryn is not super liquid but they soon shall be. In fact, with Medinah’s superior liquidity they are stealing investors interested in the ADL from AUMC. When Medinah’s AUMC shares are distributed, all of the action will shift to “AUMC” and that incredibly tight share structure with 70% of the shares being owned by management and subject to the Rule 144 resale restrictions.

You’re thinking of the upcoming share distribution like a private placement of securities that ripen on a certain date and in comes a flood of dilution. This couldn’t be further from reality. In this case, it’s actually just the opposite. AUMC will not have to compete with MDMN with its superior liquidity for any investors interested in the ADL. All interest will funnel into AUMC. The MDMN corporate vehicle may or may not survive the AUMC share distribution. If it survives, then it will own the tax loss carry forward and 11 million AMNP shares. If it doesn’t survive then management will have to distribute those assets in some fashion to us unless they’re somehow used to cancel some of Medinah’s debt.

I don’t know much about AMNP’s Llano, Mali or Poseidon properties other than they’re located near some recent discoveries. Don’t write off the value of the Puange and Caren placer properties that form the northern border of the ADL. Over the last 91 million years, any gold contained in the outcroppings of these veins with insanely high gold grades located on the northern downslope off of the ADL plateau are sitting in those placer beds. Medinah never had the budget to explore them. They ran into some issues with boulders in one area and shelved the project. It represents an excellent “area play”. The AMNP properties also act as a bridge to Maurizio’s (Masglas’s) Colliguay properties to the immediate north of the Puange and Caren properties. AMNP is going to have to be compensated if Masglas opts to swallow up those properties.

With Maurizio and family owning 70% of AUMC and Medinah’s AUMC shares being currently restricted, the obvious solution for the near term is to convert AUMC into a cash dividend machine. This is because restricted shares earn the same cash dividends as free trading shares. In the meantime, all eyes should be on any intersection with what management has been referring to as the two “massive veins”. In this case, “massive” refers to veins with a width of at least 2 meters AT SURFACE. In a mesothermal vein system, keep in mind that both the widths and grades tend to get better with depth. The last update specifically mentioned that the widths and grades were getting better with depth. Those 19 samples clearly illustrated this. It also mentioned that Richard Sillitoe himself, along with ACA Howe Mining Consultants, have weighed in and acknowledged that this is a somewhat rare mesothermal system. In Chile, for years the assumption was that there wouldn’t be any new mesothermal discoveries being made because all of them had already been discovered.

EZ, I’m wrapping up a paper on “Vein widths and mining math” that outline how the ECONOMICS of a vein system tend to go parabolic as widths increase. I’ll copy the TMP forum.

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ON THE ISSUE OF WHICH COMPANY TO BUY RIGHT NOW

*This assumes that the conversion rate of .005 holds up. If you divvy up the approx. 16,500,000 AUMC shares MDMN will be receiving, it works out to be a conversion rate of about .00577. Round down to .005 after reimbursement to our benefactor (the guy who advanced funds to pay MDMN debts).

AUMC - A $1.00 investment in AUMC today buys you 1.17 shares in AUMC (1.00/.85 price today = 1.17 sh).

MDMN - A $1.00 investment in MDMN today buys you 454.55 shares in MDMN (1.00/.0022 price today = 454.55 sh), which will be converted into 2.27 shares in AUMC (454.55 * .005 = 2.27 sh).

So, if our assumptions hold, just on a NUMBERS basis it seems investment in MDMN is the wiser play by about 94% (2.27/1.17 - 1.94). And this is consistent with what brecciaboy was saying above.

And, extending that, it seems more profitable to buy MDMN all the way up to an MDMN price of .00427 ($1.00/.00427 x .005 = approx. 1.17).

Am I missing something?

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Picked up some shares of MDMN at open this morning.

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16 million on the bid currently.

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DoneDeal, if AUMC makes $20 Million profit working one face, each AUMC share could be profiting at the rate of about 28.5 cents per share - bwahahahaha!

$20 Million profit / 70,000,000 shares outstanding = .285.

If it’s HALF of that, that’s still good.

And Maurizio once contemplated the crew working SIX faces at a time?

Something doesn’t seem right, but who knows?

Actually I agree, but for a completely different perspective. As I explained quite simply, I think AUMC management is smart enough to have controlled dilution this far by not releasing the unrestricted shares. They will wait until the free trading AUMC shares are in the several dollars range based on production progress on the ADL. They will not want to foolishly have to use any of the 30M treasury shares remaining in the 100M authorized at reduced share prices. It is surmised that many of Auryn’s earlier 350M or more purchases of MDMN shares were in the equivalent of the $3-$8 range post reverse split.

mrbubba provided a clear explanation of your perspective, and I agree. However, there exists a great deal of uncertainty regarding the future survival of MDMN based solely on receiving future dividends from AUMC production. Regardless, if that happens to still be management’s plan I will be quite happy. You state, “Medinah and its 24% stake in the ADL is extremely liquid right now.” Actually for many shareholders with accounts in some brokerages it isn’t. I have a large position in MDMN that Fidelity will only allow me to sell. This policy has been in effect ever since MDMN went dark. I’m not selling my MDMN, nor am I selling my relatively large position in AUMC, which I am still underwater on, as are many current existing AUMC shareholders. Are you a current AUMC shareholder? If not, I can fully understand your perspective.

I haven’t, as I still have a somewhat small position in AMNP which I’m actually in the green on from years ago. Some interesting things going on there with AMNP recently becoming current on it’s filings (unlike MDMN). I’ll assume there are things that only management knows at this time. As you know, Maurizio is CEO of AMNP, with Gary Goodin and Italo Volante on the BOD. Hmmm

In FY2017, AMNP U.S. purchased the Fortuna, Llano, Mali and Poseidon claims from MASGLAS. As a result, currently AMNP owns the Caren and Pangue placer property claims, and the Fortuna, Llano, Mali and Poseidon claims.

MASGLAS, AUMC, MDMN & AMNP share common management. For some reason MASGLAS was attempting to go public last year, but was unable to do so. I would think they are still planning on a way to do that. Where AMNP fits in I don’t know, but apparently it does, and it will be interesting to see what unfolds. Whatever becomes of MDMN after distribution of AUMC shares to share holders, I’m quite sure of one thing; Management will do everything possible to make AUMC a success. Far too much has already been invested in the ADL through consolidating claims into AUMC. The sole asset of Auryn mining Corporation is the prospective Alto de Lipangue Mining district and production is finally beginning to take place.

It will be a while, but if AUMC can reach a point of performing some more drilling into major targets it will be valuable to all current shareholders. Also, having something to show in PRs based on vein widths and mining math will be a very a useful tool to bring in new investors. Thanks for all you post here BB. I enjoy your input and learn a lot, even though we have different perspectives on just how this investment will attain success.

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Ummm. I think most of those “shot downs” turned out to be justified. Related to buying AUMC vs MDMN I’d argue it’s paramount to consider the capital structure. This shouldn’t be a liner math exercise based on percentages of assets. The NOLs held by MDMN will not survive as it is indeed a shell vs holding company. I don’t see a new board taking the reins and bringing things “current.” I believe BB previously asserted that it was wise for MDMN to not waste money on the same. I’d also argue that having shares in AMNP does not equate to a percentage on those assets. The last 20 years of MDMN holding on to an increasingly smaller percentage of the “assets” should have taught us something. AUMC seems to be a cleaner plays if you’re going to play.

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I have a very old

Certificate of 10000000 shares.

I have called several places that will not take it.

Does anyone have any idea how to deal with this issue.

Thanks for any help at all.

Hey Bald Eagle, just so I understand, in addition to paying back the benefactor, you’re thinking there will be further dilution of MDMN’s approx. 24% interest in and to Auryn? Or maybe that the 2.86 Billion outstanding shares of MDMN is going to increase - shares we didn’t know about are gonna come out of the woodwork? Sorry, I do indeed tend to think linear and would appreciate clarification.

Sure it’s “cleaner”, but the ADL is still a speculative play until it isn’t. If one has large positions already deployed in this “family” of stocks it may be wise to look at other speculative or producing plays.

Clearly I would agree. I have to chuckle a bit when the “cash machine” posts start surfacing again after all of these years. The company has stockpiled 9 tonnes and has taken out a small loan to start very small production to be toll milled with payback terms we don’t currently know. I might suggest a bit of caution for those referencing a cash machine (for the umpteenth time). Unless, you expect this generous lender to keep offering interest free loans, you can/should assume that any profits not being used to repay the loans will slowly trickle back to the project level so the company can scale, over time. This isn’t necessarily a bad thing but, as with all things in mining, progress is measured in years not months.

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$20M profit less $1.5M loan repaid leaves $18.5M to dividend out, buyback shares, and/or reinvest for scaling. Enough to go around.

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