DoneDeal: âThey have to be generating some kind of revenue already. How are they paying these guys?â
TradeRich: âSharesâŚ?â
Madmen: âBitcoin?â
MASGLAS likely footing the bill for now.
If theyâre accepting Bitcoin for work done Iâd be concerned.
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Whenever I/we did s start up company, we made sure the people we hired had a solid income. I guarantee these guys are not sitting in an office with cubicles and plate glass staring at each other. The ongoing huge payroll wouldnât be supported by any means unless the company was producing, so sorcing out is what makes the most sense. Something that you could accomplish with out doing this full time for one company, thus the pay is scarce and as I think TR was referring, most are willing to work for shareâs as they believe there âISâ gold in them thar hills, this reducing overhead and thoughts of extreme rewards down the road. Sometimes the problems that you run into is that the amount of time one may have to spend becomes a little taxing compared to rewards thus the high rate of turnover of personnel. The closer the group gets to achieving a self sufficient company the stronger the team and you will notice that it will be a much tighter group with stronger communication skills⌠Moo, but that would be my approachâŚ
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One thing shareholders need to keep in mind - Auryn, like any legitimate mining company, is in this to make money. No legitimate company likes or wants to sell shares to fund operations, because that dilutes ownership - theirs and ours. However, as a non-producing startup, until they start producing there is no other alternative aside from incurring debt. Maurizio and Auryn know they need to get a production stream in place ASAP and they were working on that initially; however, they encountered unanticipated issues (regulations/permitting, weather, loose rock, veins veering from projected path, extra chimneys, etc.) along the way which hampered their initially publicized production goals. These arenât excuses, they are the realities of mining.
With the spring I hope to hear something about their efforts to ramp up production in the upcoming weeks/months, but even as anxious shareholders, we have to remain patient and understand that mining is not a quick, simple or straightforward process. It takes patience, time, money, skill and yes, some luck. So when I hear someone saying âThey should be producing by nowâ - well, thatâs a limited and naive perspective and assumption taken from the comfort of our computer screens. That expectation doesnât necessarily match the realities on the grounds and in the tunnels of the ADL. I know Kevin tried to re-educate this shareholder mindset during his tenure as CEO. And I think most MDMN (soon to be Auryn) investors in the post-Price world realize this, or are at least they are coming to realize this.
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I think those are sound and wise words.
I would add though that I donât think you hire a âlogistics managerâ, a âdata managementâ person, even potentially a COO, until you have a pretty solid and rather imminent (as in NOT ânext yearâ) ramp up production plan. Now perhaps most of these people were just moved over from Auryn Mining and were hired upon earlier production plans and are therefore not indicative of any recent changes. However, if you combine this complete management team with all the statements that have been made since October including Maurizioâs own bio:
Through his efforts AURYN consolidated the Altos de Lipangue mining district, a very promising greenfield project less than 40km from Santiago, Chile, that was fragmented for over 41 years and is now being explored and put into production.
I think it is pretty clear that the intent is a rather imminent start up / ramp up. I guess thatâs just a long winded way of agreeing with your statement: âWith the spring I hope to hear something about their efforts to ramp up production in the upcoming weeks/monthsâ
One of my concerns going into the fall of 2017 was that there was nothing stated earlier in 2017 / 2016 which really indicated a firm conclusion to enter production. There was plenty of early talk about ideas but no clear indication of decision. There had been expressed a clear desire to start production on the Merlin 1 vein and perhaps on the Fortuna claim at surface. But we had no clear update on that throughout 2017. Who knows what they learned since Feb 2017?
But since Oct there have been multiple statements, granted without much detail, expressing a clear intent to start production on the Caren / Merlin 1 and even the Fortuna. So this indicates to me the risk that they may have learned something in 2017 to severely modify their production ideas is no longer a high risk. They still intend to start production even with everything they learned in their 2017 work / analysis. Of course there is always risk of learning something new / unexpected.
So, bottom line, I am confident your hope of hearing something will be fulfilled. Of course there are lots of areas that will be of interest. But everything becomes easier / less risky if we hear those high grade gold discoveries (esp. the bonanza grades) are real and mineable by Auryn for a sufficiently long period to support a big âmassiveâ exploration period.
Along these lines, Aurynâs statement re. the intention of Cerro âbecoming a junior and major mining companyâ is a very bold statement. It has to be taken with several grains of salt until there are details provided in regard to that vision/intent. In the short term mostly I am interested in the details of what they learned in 2017 that could support such an idea (e.g. accessible Caren grades, mining rates, Fortuna grades / tonnes). Weâll see. But I am quite sure we wonât be slipping into a another winter season (itâs already mid-summer there) without having some clarification and more detail on what they intend and believe can happen.
After that comes the evaluation of risk to the execution of whatever plan they put out there. But until the plan / vision is presented ⌠we wait.
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Serious question:
Who feels there will be a reverse split considering all the shares outstanding to be? One, to lower them and two, to assist getting on a better exchange that has been stated as a goal? TIA
oz
A reverse split is an absolute guarantee - it is the 2nd (or 3rd?) part of the transaction in order to get the ownership percentages among each entity correctly distributed.
Keep in mind, this would not be a reverse split out of desperation that is common in the pink sheets and something to be fearful of. This RS is merely transactional.
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Do you mean that as part of the .558 transaction or a RS that will happen after that?
oz
Okay, I guess you actually answered my question. The problem I see is there will still be 1.x billion shares outstanding after the transaction right? And after the transaction, the share price will still be too low so Iâm very concerned about another RS, the kind you DO have to worry about. oz
It wouldnât make sense for the company to perform 2 reverse splits. That would be like going to the bank to withdraw $100 and rather than doing that all in one transaction in the morning, you withdraw $50 in the morning and go back to the bank in the afternoon and withdraw another $50. That would be wasteful and doesnât make any sense. I am confident that the companyâs share structure will be properly adjusted a single time upon completing this transaction.
I donât know where you are coming up with 1.x billion shares outstanding. CDCH has 7 billion shares outstanding. That number was raised in order to perform the transaction in the simplest possible way so that all parties retain the correct pro-rata ownership. CDCH is not going to continue to trade with 7 billion OS. They will bring the share count down (reverse split) to a manageable level that shareholders are unaware of at this point. They could bring it down to 100 million if they want and cancel 6.5 billion shares so that they have 100 million OS and 500 AS. Not sure what figure they have in mind. Whatever the case may be, they will/should leave the share structure enough wiggle room (AS) so that they wonât hit the AS and be forced to either RS or raise the AS again.
The only scenario I see them doing a second reverse split is if further down the road they have an opportunity they didnât anticipate to list on a higher exchange where they have a minimum share price requirement in order to list (e.g. NASDAQ requires a $1.00 share price). But that is further down the road and doesnât really warrant contemplation (or fear) IMO.
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Very good Sir. I feel better already. Didnât realize the share structure was in the making. Not sure where I read the 1.6x from but the 7 Billion is even worse! But if you say they will make it reasonable I believe you. Hope all goes well and thanks.
oz
Absolutely correct, 7B was not an arbitrary number. For simplicityâs sake, the 5% ownership of CDCH was used as the basis in the derivation of the proper number of shares to authorize . The 5% Cerro ownership of AURYN is the existing 350 M shares of CDCH (7B shares x .05 = 350M). Allocation of remaining 6.65 B shares between AURYN and MDMN is simply reduced to a percentage. Whatever the final reduction by a RS will be pro-rata, based on the percentage of ownership of all parties. It is only the percentage ownership that becomes important. To use HRâs example, a 1 for 14 split would result in a 500 million AS count where 100M could be allocated to the OS. This is only an example, it is up to management to determine the appropriate split.
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Appreciate that Easy. Certainly changes how I was thinking it was going to end up. Thanks.
oz
I thought this might be insightful to see what it takes and how things can be financed to start a mining operation:
Monday January 08, 2018 08:36
The board of directors of Equinox Gold Corp. (TSXV: EQX, OTC: LWLCF) has approved full-scale construction of the Aurizona Gold Mine in Brazil, with the cost estimated at $146 million, the company says. Early-works construction began in the third quarter, and the companyâs timetable calls for a gold pour by late 2018. âThis will be a milestone year for Equinox Gold as we advance Aurizona and transition the company from a developer to a meaningful producer, with more than 135,000 ounces of annual gold production expected from Aurizona,â says Christian Milau, chief executive officer. David Laing, chief operating officer, says the tailings dam raise is nearly complete, the mills are ordered and significant earthworks completed in preparation for installation of the mills and other new plant infrastructure. Approximately $25 million of the budget was spent in 2017 during early-works activities. Officials say Aurizona construction will be fully funded with Equinox Goldâs existing treasury and an $85 million secured project credit facility, from which the company has drawn $15 million to date.
Would the seller just dump all his shares and be done already so we can move forward!
Off TopicâŚI think another thread for just discussing any stocks in general would be great. For instance, I am looking at buying some Under Armor (UA) and would love to hear what other people on our board have to sayâŚ
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Maybe we should suggest they name the new company with Crypto in the name. Kodak got in the game and their stock price doubled today! Donât you think the Crypto Mining Play has a nice ring to it 
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