Auryn did their job and they paid Medinah 16.4 million “AUMC” shares, which represents a 23.56% share of the entire ADL Mining District. You may have noticed that when a big hitter like Eric Sptott buys a stake in a company, it almost always ends up being a 9.9% stake. If you cross the 10% threshold, all kinds of rules kick in that can be a real pain to navigate around. Medinah’s 23.56%stake in AURYN puts them in this no man”s land. Sometimes the SEC is in a mood to be helpful; sometimes not.
My gut is that Les Price’s extracurricular activities might have put the SEC into a sour mood, but I don’t know this to be a fact. There are a variety of ways this could play out and I personally have no doubt that the Medinah shareholders will do just fine. I personally think that Auryn is about to hit it out of the ballpark and that a 23.56% stake in Auryn is going to be a highly sought after commodity. Auryn’s becoming cash flow positive soon should give Medinah some bargaining strength- and if Auryn becomes fully reporting to the SEC then the SEC should become a happy camper.
I’d like to see Auryn issue a tiny cash dividend as soon as it becomes feasible. Medinah could take the cash and retire its debt. This way all 16.4 million of those AUMC shares will go to us and none will have to be sold to strangers in the open market. Thankfully, Medinah’s debt is not interest bearing which is a blessing for us. The lack of liquidity in our Medinah shares sucks but it doesn’t make a lot of sense for Medinah to be paying accountants, lawyers, and listing fees as a mere “holding company”` when Auryn provides all of the pertinent information in their quarterly and annual filings.
Who is the debt owed to for Medinah? Are these parties connected to LP and the fraud ring? Why doesn’t Greg Chapin pay for it? How has he been held accountable?
Thank you for the info, BB. I’m sorry if I’m pesking you with too many questions, i just want to tap into your extensive knowledge of NSS. From your post, I’m still not clear about the large blocks of MDMN sold from the ‘expert market’ for mere pennies.
I wonder how this might tie in with the millions of shares generated by the market makers who desperately tried to take MDMN down. Are they held accountable in any way for shorting MDMN to death’s door? Will anyone profit from those NSS shares? If so, that would be insane. If you’d rather avoid any speculation down that rabbit hole, I would understand.
I believe I read a few years ago that Chapin turned in all his stock when he resigned. Please don’t hold me to that as I’m 73 now and was 50 when I first bought Mdmn.lol
Man oh man. One would hope that they have the permits and are moving equipment post receipt. The updates are so sparse of any information that it becomes a complete guessing game. I didn’t even know that a company could start construction before receiving engineering and environmental permits but AUMC seems willing to roll the dice. This tactic clearly saves a lot of time, assuming they ultimately get the green light.
Contrary to public opinon on this board, nobody is more excited to see these guys finally get the mill up and running. I’ve been right to be skeptical on forecasted timelines but they will get there eventually. Based on the latest pictures, Feb or March seems reasonable IF they get the permits. We have zero information on critical infrastructure (water, power, etc) so its very hard to model out timing, processing costs, actual scale, etc.
BUT, who wouldn’t be rooting for these guys to get this thing built so that we, as investors and spectators, can empirically and objectively measure the merits of this operation, strategy (chasing the vein) and quality of the grade (nobody relies on historical).
It gets pretty boring being skeptical and right for all of these years. Production brings everything together. With proper execution comes loads of profit potential, with misteps the assets go to the lenders. No more false claims of production without consequences. Real money has been raised and spent on a facility that needs to be profitable, over the short-term for the operation to be viable. Rubber meet road.
While Maurizio took a lot more than his fair share of equity upon the “acquistion”, he has a lot more on the line than anyone, by a mile. I NEVER would have guessed he would risk $10M of his own personal funds. As they say in Chile: “Tener la raja pela,”
At the risk of speculating with very little information (which this company better improve if/when they start making money) and assuming these guys are able to finally build the facility and mine proficienty:
the AISC will be $1500-$2000oz in the early years (with room for improvement with various efficiencies and scale). This does not incude debt financing charges.
grades will average 10-12gpt with long stretches below and above that range (resulting in lumpy cash flow).
even with the stockpile of pure gold, production in the first year will be 3-5,000 ounces
production, post stockpile, via actual mining, will be 5-7,000 ounces (this is extremely generous and assumes 250 days of operation, with no seasonal or maintenance interuptions).
modular expansion of the mill from 100tpd to 150tpd could occur after 2-3 years if everything is firing.
Any and all free cash flow, after servicing the debt (which we know nothing about) and paying back Maurizio will go into advancing exploration efforts. As is typical with any mine looking to grow.
It will require at least 3 years to pay down the debt (assuming the majority of FCF is spent amortizing those obligations). After the debt is paid down the company has the option to expand to 150tpd, if the volume warrants the same.
IF AUMC is in the ballpark of meeting the preceding points, and gold stays at these levels the current valuation ($60M) is within the approximate range of “fully/fairly valued.” Keeping in mind, the enterprise value is closer to $100M.
If AUMC misses the preceding points, its unlikely that the equity will carry value and the project/assets will transfer to the lenders. AUMC will need to be very diligent and vigilent in juggling debt obligations together with lumpy cash flows. You can’t miss an interest payment just because you lost money in any particular quarter.
If AUMC exceeds the preceding points, there is either a little or a lot of upside from today’s levels. Thankfully, for those that are spectating, there should be plenty of time to “observe” before having to make a decision to, or not to, commit $$. Based on the level of volume in what is supposed to be a “sizzling” phase for any mining company, I think its fair to say that the market agrees with a “wait and see” approach.
Luckily I still hold significant shares of MDMN, and I started accumulating AUMC early on. Still, I can understand other MDMN shareholders’ concerns.
BB said he’s confident MDMN shareholders will get a fair deal, and I tend to believe that. Today’s news should be good news all the way around, imo. I forgot the estimated time it may take to complete the FF plant, including assembling/building the parts delivered & then calibrating it. They’ll get it done asap.
Those with large positions in MDMN have been waiting far too long, but at least we have some basic knowledge as to ‘Why’ it’s happening this way — even though parts of it are a bit vague.
mrbubba, I know you agree that we’re at production’s door right now. Some ‘fudders’ (as you coined the term) may zero-in on the past as they know it. Then they tweak their opinions accordingly. Oh well. Sometimes it’s just a matter of Sweet Lemons, Sour Grapes. WhatRYaGonnaDo?
The good news is we don’t have to be exact on when the plant and facilities will be complete - we have a partner, MC, who is motivated to get his money back and is literally moving mountains to get the property into consistent production. My bet is that’s happening, one day at a time.
An un-assayed stockpile does not represent value or collateral/security. Nobody knows the blended grade of that pile of dirt, including Maurizio. Running material thru a mill at a profit, even with a high grade stockpile is extremely risky and there’s nothing about the project that is zero risk. I would add, even if they are able to mine the stockpile at a profit it won’t throw off enough FCF to pay down all the debt. They will need to process the stockpile AND mine ore profitably before this becomes “less risky.”
The reason why no miners take on debt is because of the simple fact that one misstep can lead to a default. Whether it’s an “act of God” (weather) or human error (equipment malfunction, metallurgy, losing the vein, etc, etc) there is very little room for mistakes/delays/downtime when monthly interest payments and debt amortization is due.
Water and power was addressed over a year ago! This is a section from the October 2024 update:
“Flotation Plant Developments
We are making substantial progress in the development of our flotation plant, which will have a processing capacity of 100 tons per day. Current developments include:
Topography: A detailed topographic survey covering 1 km² has been completed for the planned location of the flotation plant.
Hydrogeology: Hydrogeological studies indicate access to at least 1 liter/second of water, which is twice the amount needed for operations. The region’s Mediterranean climate supports natural aquifer recharge.
Energy Supply: We are negotiating with an energy provider to ensure a sustainable energy supply, prioritizing renewable sources at a cost below the regional average.
Water Management: A 100% water recirculation system will be implemented to minimize consumption, with an estimated recovery efficiency of 80%, considering losses due to evaporation.
Technical File: The technical dossier for obtaining the necessary permits is nearing completion, ensuring compliance with all legal and technical requirements.
Equipment Procurement: Initial orders have been placed for key equipment, including crushers and a mill, to ensure timely delivery.
Geochemical Laboratory: The necessary equipment has been selected to establish an on-site geochemical laboratory, which will be operational before year-end. This lab will facilitate same-day analyses, crucial for exploration and future production control.”
