Something tells me that JJ “to be considered” compensation for tendering his share of CDCH Chile is involved in this. I wouldn’t doubt it if this project was owned by JJ.
BTW, with a decent crushing circuit, you could blow through 1.5 million tons of rock in 18 months. The problem is if these tailing were already treated with cyanide, they are worthless. The only positive aspect is that the proposed board appear reputable.
Every stock even the ones that move to a higher exchange usually face another round of shorting right after a R/S… I have seen it too many time for comfort. Enough times to say that the probably is that the stock price will fall, significant within a relatively short period of time!!!,
Three examples (amongst many) RS that have worked (very well)
In mid-2003, Priceline.com (NASDAQ:PCLN) did a 1-for-6 reverse stock split, lifting its stock price from around $3.50 per share to $22, as many investors believed that the William Shatner-led Internet travel service would fade away with so many other dot-com companies. Now, 12 years later, the stock trades above $1,200 per share, giving long-term investors a 50-bagger with room to spare.
In 2000, Laboratory Corp. of America (NYSE:LH) did a 1-for-10 reverse split after having seen its stock stuck in single digits for more than five years. Within two years of the reverse split, LabCorp had not only recovered, but it had also done two separate 2-for-1 regular splits, and the stock now trades for six times its split-adjusted price immediately after the reverse split.
Corrections Corp. of America (NYSE:CXW) traded as low as $0.60 per share in 2001 before reverse-splitting 1-for-10. Since then, the private prison-services provider has seen its stock jump more than tenfold, with two regular splits helping to drive the company’s total return higher.
I did not say it never works just that the odds are against you! BTW I find it very difficult to put MDMN in the category of any of those examples.
probably not for $1.5M startup though
even if Les did produce this deal out of his bag of tricks → it’s very unlikely he came up with the BOD and it’s very unlikely, imo, that the Days would have simply just proceeded to tie themselves up with Les and Cerro Chile with no contacts in Chile, with no experience in Chile, with no hope of anything but Les servitude in your future.
Surely, it is extremely likely the Days would have at least consulted AMC and maybe that’s where the BOD came from as a 2nd step once the idea was accepted. Hopefully someone will attend the meeting and get answers to how Cerro Chile and Les relate to this and what level of control and detailed information does CDCH and this new BOD have in regard to Cerro Chile / Les.
A R/S would also cause the Days to do a R/S on their preferred as well, unless they make a crazy exception!
If CDCH is at a buck MDMN will be close to 10 cents and I’ll be happier than a pig in sheet. So, I don’t have any argument to your exit strategy.
Maybe Les made some money as a finder’s fee for this deal but again, just because he says he was involved doesn’t mean that he was and, to reiterate, the BOD who’s advanced this little project don’t typically associate themselves with the likes of Les.
I wouldn’t be surprised if the proposed BOD for CDCH ends up on MDMN’s BOD as well. Seems like a good fit, Geo, lawyer, etc.
There’s more to this deal than meets the eye.
It really does matter what anyone one of us thinks about the R/s since the Day’s has control of the voting and it will happen without any shareholder’s direct influence.
Karl, I have never seen a reverse where the preferred were reversed. I don’t expect to see it here.
Ha! No. Juan is not involved.
The driving force behind of all this new life in Cerro is Jose Manuel Borquez Yunge. Maybe Medinah should put him on their Board especially if he is able to generate some early successes for Cerro in Chile.
I would go with that summary also. 1. Les didn’t come up with these guys. 2. These guys did not pile into a penny stock BOD just for a little $15M project over 3 years. More going on here.
https://www.linkedin.com/in/jose-manuel-borquez-5319ab17
A little Codelco connection. A little Glencore connectino. Legal profession. Peru connections. Chile connections.
Another potential explanation is that this is a move by a lurking bigger party who wants to be in the front row should Auryn’s efforts on the mountain prove out.
I’m not sure why you need the tailings operation other than perhaps to provide operating cash for a few years. But the most important part may be control of the 5% of AMC in case AMC’s efforts prove out. Then you have the front row seat to make the move for that 5%. That would explain the big names and is not that far fetched - although certainly speculation.
AMC’s connections. They mention it to Les who takes it to CDCH. Les takes credit. It could actually make sense.
Is there still that old tailings pile up on the Alto? Maybe AMC could get CDCH to clean that pile up too.
The Days have given the shell to the new board for nothing and the new Boyz will control our 5%. They will get to decide to pass on the benefit of the 5% to the shareholders or use it for some yet unknown project.
I don’t think they can in any practical way “pass on” / dividend the 5%.
At best you would receive certificates of shares in a private chilean company in your mailbox, completely un-tradeable, and nearly unaccountable by any normal U.S. investor. Unless AMC contacts you and offers you a check, you have no way to sell your shares. And depending on how many shares there are they may not be easily divisible among so many cdch shareholders.
For better or worse, CDCH is the very illiquid public mechanism whereby we are able to realize value for those AMC shares - or not.
If one looks at reality, the proposals are done via Days voting block. What not is done is the capital raise. Given the past history of all the related companies, I would find it hard to believe they will raise the money from shareholders. In most TSX-V companies, the officers/directors usually make an intiial commitment for a piece of the offering. The old “skin in the game” motto. If that happens, it will give a lot of comfort and the raise may actually succeed.
Who bought a shell?
Where the preferred is convertible to common the conversion rate is usually adjust appropriately.